Natural Gas Wednesday
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Started by metmike - Oct. 31, 2018, 11:32 a.m.

For the weather that affects residential heating demand and natural gas prices, go here:

https://www.marketforum.com/forum/topic/16323/

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By metmike - Oct. 31, 2018, 11:33 a.m.
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By metmike - Oct. 31, 2018, 11:34 a.m.
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For the previous discussions on natural gas, including 3 recent articles that have extensive fundamental information which will be key to pricing this upcoming Winter, go here:

https://www.marketforum.com/forum/topic/15990/

By metmike - Oct. 31, 2018, 11:34 a.m.
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Storage is Very Low for this time of year!!


Storage is below the  bottom of the previous 5 year range and still around 600 bcf below last year at this time!

This is why the temperature forecast matters....in  the Summer/cooling season and now in the early part of the key Winter/heating season............which is looking milder early on Monday.


Working Gas in Underground Storage Compared with Five-Year Range

By metmike - Oct. 31, 2018, 11:34 a.m.
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EIA injection on Thursday was +58 bcf but with 5 bcf reclassified, it was actually 63 bcf. This was extremely bearish!                                                                                                                                                                                                  

Working gas in underground storage, Lower 48 states Summary textCSVJSN
  Historical Comparisons
Stocks
billion cubic feet (Bcf)
 Year ago
(10/19/17)
5-year average
(2013-17) 
Region10/19/1810/12/18net changeimplied flow  Bcf% change Bcf% change
East825  812  13  13   913  -9.6  903  -8.6  
Midwest934  908  26  26   1,078  -13.4  1,058  -11.7  
Mountain177  177  0  0   224  -21.0  215  -17.7  
Pacific262  264  -2  -2   315  -16.8  346  -24.3  
South Central896  C877  19  24  C 1,171  -23.5  1,196  -25.1  
   Salt218  203  15  15   311  -29.9  324  -32.7  
   Nonsalt678  C673  5  10  C 859  -21.1  872  -22.2  
Total3,095  C3,037  58  63  C 3,701  -16.4  3,719  -16.8  

C=Reclassification

                                    

By metmike - Oct. 31, 2018, 11:35 a.m.
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Here's the temperature map for this last EIA reporting period.


Huge cold anomalies and residential heating demand.............which should have reduced the injection by more.........except that massive supply is hitting the market finally.

http://www.cpc.ncep.noaa.gov/products/tanal/temp_analyses.php


http://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20181019.7day.mean.F.gif

By metmike - Oct. 31, 2018, 11:35 a.m.
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Here's the temperature map for the next EIA report. Tomorrow at 9:30am.


A huge -6 deg. C anomaly in a very high population area has me guessing that the next injection will be smaller than the last one. 

Maybe +48 bcf?? This is still bearish for the amount of cold.

Any other guesses?


http://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20181026.7day.mean.F.gif

By metmike - Oct. 31, 2018, 11:40 a.m.
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   Yesterday's discussion:             By metmike - Oct. 30, 2018, 1:17 p.m.            

  

Very mild 12z operational GFS putting pressure on natural gas....though most of the price drop occurred before it came out.

The very cold 0z GFS last night(outlier) is mainly what caused the huge spike higher early this morning.


The  European model monthly(768 hours) had a major cold outbreak in the Midwest/East in week 3 late yesterday and that might have been a factor in the spike higher (though I would never trade off of that product).


The MJO looks like it would be favorable for warm weather in November. Is that what you have Larry?


When natural gas trades/moves like it did last night and very early this morning, it's almost impossible to trade. 

++++++++++++++++++++++++++

                                    

                By WxFollower - Oct. 30, 2018, 6:03 p.m.                        

Mike said: "Very mild 12z operational GFS putting pressure on natural gas....though most of the price drop occurred before it came out.

The very cold 0z GFS last night(outlier) is mainly what caused the huge spike higher early this morning.


The  European model monthly(768 hours) had a major cold outbreak in the Midwest/East in week 3 late yesterday and that might have been a factor in the spike higher (though I would never trade off of that product).


The MJO looks like it would be favorable for warm weather in November. Is that what you have Larry?"

-----------------------------------------------

Mike,

 I think that NG rise this morning after 6:30 AM CDT was largely related to colder late week 2 forecasts despite slight warming early week 2 and during week 1. Then, like you mentioned, it fell back late morning before the 12Z GFS was released. I have no answer on the MJO.

++++++++++++++++++++++++++++++++++++++++++


                                   By metmike - Oct. 30, 2018, 7:03 p.m.            

                                    

11-8 to 11-12 on the 0z GFS last night was the only major cold intrusion for that model that greatly exceeded average HDD's.

         ++++++++++++++++


                By metmike - Oct. 30, 2018, 7:10 p.m.            

            

From Natural Gas Intelligence:

Chilling Cold Creeps Back into Weather Outlooks, December NatGas Slides a Penny

     5:56 PM    

"Shoulder-season volatility -- in both weather models and natural gas pricing -- continued on Tuesday as traders appeared unsure of what to make of the latest weather data, which reflected a return to cold weather in the long range but warmer weather through the medium term. The Nymex December gas futures contract, in its first day in the prompt-month position, settled at $3.187, down 1.1 cents on the day. January slipped 1.7 cents to $3.244. "


I'm not sure if they are referring to the European monthly that showed a widespread cold outbreak in week 3 on its update late yesterday. That 768 hour model is updated twice a week.......on Monday and Thursdays.

It doesn't display a great deal of skill for sure but the spike up early this morning was pretty powerful.........and didn't last long but must have been the result of either that, or the much colder 0z GFS mentioned previously or the updated CFS weeks 3-4 that I will be getting later tonight hopefully. 

++++++++++++++++++++++++++++++

                     


                                      By WxFollower - Oct. 30, 2018, 7:12 p.m.            

            

Mike,

 Thanks for clarifying. With the various models and runs, it can get confusing about what appears to be causing each price move.

 Edit: my provider had a change of -4 HDD week 1 through early week 2 but that was negated by a +5 HDD mid to late week 2 fwiw.

++++++++++++++++++++++++++++++

       


                By metmike - Oct. 30, 2018, 8:01 p.m.            

            

Am getting the CFS, latest updates 4 times a day as of a few minutes ago from Radiant.  I like their products. 


I'm not suggesting this had anything to do with the big spike higher last night because I haven't followed this product based on current updates but note that the 0z run of the CFS week 3 had below normal temps over the eastern 1/3rd of the country vs previous warm forecasts for week 3.


Not surprisingly, 2 runs later on the 12z CFS run for week 3, the same area had much above average temps........so there is not much skill and this is well known.  I would never use the CFS to trade on unless it suddenly shows something powerful on many consecutive runs that also lines up with the more important weather changes in the 2 week forecast. 



By WxFollower - Oct. 31, 2018, 3:24 p.m.
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IMO: NG rose on colder 12Z Euro 6-10 on the back of colder 12Z GFS/GEFS 6-15.

By metmike - Oct. 31, 2018, 4:12 p.m.
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Agree Larry that this added to the already healthy gains for the day.

EIA report tomorrow morning will be getting lots of scrutiny with storage so low.

I guessed +48 bcf.  

Would you, Jim or anybody else want to venture a guess?

By metmike - Oct. 31, 2018, 7:24 p.m.
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                               Re: Re: Re: Re: Re: Re: Weather Wednesday            

By metmike        

            The just out 18z operational GFS captures the essence of the current cold risk that the market is trading right now(dialing in). 

As mentioned earlier, we have an increasingly negative AO, which creates an environment more favorable for cold air to be transported from higher latitudes to lower latitudes.

In a addition, during week 2, as mentioned, we have a strong cross polar flow bringing the coldest air on the planet right now, from Siberia across the polar regions, then onward into northern parts of North America.............northern Canada at least, if not even farther south.

This last run, is looking pretty extreme and is  going to look different than the next few and an individual solution like this should be taken with a grain of salt. However, it shows the mother load of frigid air making it across Canada, with the southern edge coming across the US border during week 2. 


In order for this to happen with such gusto, we would need a piece of the Polar Vortex to come pretty far south, into Southeast Canada, with the northern jet stream on its backside aimed towards the Great Lakes.

The next run will probably look different as this run may have latched onto something that it over amplifies. However, the other models have been trending in this direction for the last 36 hours(European model longer than that).............so a  weaker version of this is very possible......to increasingly likely if it continues to be the trend.

One thing to note. There may be a sharp contrast between the frigid Arctic air to the north and much warmer air to the south.  If the Polar vortex sets up in Central Canada, instead with bitter cold, the US could end up very mild at the same time. 

If that happened, which is also possible, then the bullishness of the weather forecast would be peaking right now with this threat.

              

      gfs_namer_300_200_wnd_ht
      gfs_namer_300_200_wnd_ht_s.gif   
      gfs_namer_300_500_vort_ht
      gfs_namer_300_500_vort_ht_s.gif   
      gfs_namer_300_1000_500_thick
      gfs_namer_300_1000_500_thick_s.gif   
      gfs_namer_300_850_temp_ht
      gfs_namer_300_850_temp_ht_s.gif
By metmike - Oct. 31, 2018, 7:25 p.m.
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Closing comments from Natural Gas Intelligence:      

A Flip Colder for Mid-Month Bolsters December Natural Gas; Sumas Spot Gas Tumbles on Increasing Imports

     7:15 PM    

December natural gas futures strengthened Wednesday as the possibility of chillier weather in the medium range and persistently low storage inventories once again caused jitters for the market. The Nymex December futures contract rose 7.4 cents to $3.261, while January climbed 5.8 cents to $3.302.

By metmike - Oct. 31, 2018, 8:56 p.m.
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Today's day session high of 3.294 NGZ was the highest price since last Wednesday's weekly high of 3.314.

The very bearish EIA report last Thursday and mild weather forecasts took us down to this weeks spike low of 3.133 early on Monday.........as the front month, November expired with a sharp spike lower Sunday Night and  early Monday, then spiked back to positive territory near its close. 

The new front month December took over and has been supported after that point by extended models turning gradually colder(with the 12Z Monday run of the European model, sort of tipping us off with regards to the first sign of cold surge potential).

                By metmike - Oct. 29, 2018, 4:11 p.m.            

            12z operational European model day 10

"A brief cold shot in early week 2 caused the ngz, now the front month to just touch new highs just prior to 2pm when it came out." 


The October high for NGZ was 3.409 on the 10th, which was the highest price for NGZ since August of 2015, over 3 years ago. However, I think the front month of natural gas spiked to the 3.5 area this past January during a major cold outbreak. 

The 3 year highs for NGZ-18 were set earlier in October because of low storage and the approach of near record cold that lasted in many places for close to 2 weeks. Tomorrow's EIA report includes the 2nd week of that very chilly period. 

By WxFollower - Nov. 1, 2018, 1:22 a.m.
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 I'm guessing +45 bcf for the EIA report.

By metmike - Nov. 1, 2018, 4:06 a.m.
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Thanks Larry,

So far tonight, the GFS operational and the Canadian ensemble much warmer, Euro a bit milder but the Euro ensembles and GFS ensembles are mixed depending on the periods compared to the previous runs.........but that run was colder on all the models vs the one before that............at least thats what I remember at the moment.