The front month, December Natural Gas goes off the board tomorrow. Prices can get especially volatile ahead of expiration but considering the way ng has been trading for the past month, volatility has been the norm EVERY day.
For the weather affecting the natural gas market, which trades on the forecast for temperatures that determine residential heating demand, go here:
From Natural Gas Intelligence:
December natural gas futures were trading 1.8 cents lower at $4.230/MMBtu shortly before 9 a.m. ET as forecasters continued to point to risks for milder temperatures by the middle of next month
The storage deficit with a year ago increased last Thurday. It's now -620 bcf after last week's record earliest triple digit withdrawal at -134 bcf.
But most of this bullish news was dialed in last week and previously. We spiked higher briefly after the number came out and could never get back to that price again.
|Working gas in underground storage, Lower 48 states Summary textCSVJSN|
billion cubic feet (Bcf)
|Region||11/16/18||11/09/18||net change||implied flow||Bcf||% change||Bcf||% change|
These were the temperatures for that report:
Here are the temperatures for the 7 day period(ending this last Friday) for the next report, this Thursday at 9:30am.
Another unusually big drawdown for this early in the season but smaller than the previous week.
Colder in the Northeast but milder everywhere else.
Is the top in? Going to take some extreme cold to get back up to the highs of 4.949 on December 14th.
Repeating the frigid Winter of 5 years ago, gets storage to precariously low levels and the price spikes to the highest in over a decade. Based on the EIA projections and stats below, if we used up the same amount of gas this Winter, as we did 5 years ago, supplies would end up below 800 bcf(maybe not lower than that because extremely high prices would discourage some demand)!
Repeating the mild Winters of 2 and 3 years ago and storage catches all the way up with last year and prices get buried below $3 again by late Winter(with the huge amount of demand early in the heating season, that means the catching up might take longer now-early Spring with a mild Winter).
Right now EIA projects winter heating demand at about 6.6 TCF, and end of season inventories at 1.37 TCF on March 31st. Heating demand over the last 28 winters ranged from 5.7 TCF to 7.3 TCF, averaging 6.4. Here's the history from EIA:
.... look out for expiration ... man o man .... I remember a restroom break the day of @ 6:57 AM CST ... about 17 years ago and I was leaning on a resting 500 lotsell order to get short....mind shattering..coming back 3 minutes later and it was up 1.63 (*actually there was an overnight computer access that had a 1.50 limit( however, with options.... you know what I mean...*)... I was down 32, K (*LARGE*)... all 2 lots.... called in, got out on the floor re-opening ...
...wooo weee coach...
Really "POWERFUL" Information Metalic/Mike, you produce...which is knowledge... which is power...
... thought I wouldput up a current "daily" , F-January Contract
chart up.... for those of you who are not familiar with Henry Hub
Natural Gas futures....the daily moves that we are witnessing are
(*insane*) possible 9,000.00 per contract 1-lot....wild wild west ...
Thanks for the chart ss!
Closing comments from Natural Gas Intelligence:
More in Daily GPI
Natural gas bulls and bears duked it out in a split decision Tuesday as futures held steady after testing both sides of even. In the physical markets, at least one West Texas seller paid to get its gas out of the constrained region as reports of negative spot prices emerged for a second straight day; the NGI National Spot Gas Average climbed 5.0 cents to $4.345/MMBt
Opening for Wed NG from earlier.
Front month expires today!
December natural gas futures, set to expire Wednesday, were trading 17.1 cents higher at $4.433/MMBtu shortly before 9 a.m. ET, with forecast heating demand gains overnight setting the backdrop for a potentially volatile last day of trading for the contract