Thanks much Larry!

Here's the weather that affects the natural gas market.  Cold causes an increase in residential heating. Hot causes an increase in residential cooling. Around May 8th, we make the turn in CDD's, seasonally passing up HDD's.......and  we are passing up May 8th this week and will see  CDD's going up.........when the pattern shifts back to warmer again.

Weather Sunday:

https://www.marketforum.com/forum/topic/29385/

Monday Weather:

https://www.marketforum.com/forum/topic/29485/

Tuesday Weather:

https://www.marketforum.com/forum/topic/29576/

Wednesday Weather:

https://www.marketforum.com/forum/topic/29645/

Thursdays Weather

https://www.marketforum.com/forum/topic/29731/

Fridays Weather:

Weather ‘Uncooperative’ as Natural Gas Futures Called Lower

Saturdays Weather:

https://www.marketforum.com/forum/topic/29890/

Sunday Weather: Warmer!

https://www.marketforum.com/forum/topic/29970/

Previous natural gas discussions:

Previous discussions on natural gas here:

https://www.marketforum.com/forum/topic/28858/

https://www.marketforum.com/forum/topic/28351/

https://www.marketforum.com/forum/topic/27780/

https://www.marketforum.com/forum/topic/27305/

https://www.marketforum.com/forum/topic/26861/

https://www.marketforum.com/forum/topic/26506/

https://www.marketforum.com/forum/topic/26105/

https://www.marketforum.com/forum/topic/25678/

https://www.marketforum.com/forum/topic/25189/

https://www.marketforum.com/forum/topic/24662/

https://www.marketforum.com/forum/topic/24111/

https://www.marketforum.com/forum/topic/23680/

For the past 7 months, the amount of heating  demand from cold weather in the high population centers  of the Midwest and East, historically-seasonally  are the most important factor in price determination for natural gas.

As the weather warms up gradually in the Spring, the heating degree days(HDD’s) go down and CDD’s go up.

At some point they intersect and CDD’s pass up HDD’s for good..........until October. That point is around May 8th on average. 

So starting in the 2nd full week of May, population weighted CDD’s because of hot weather are greater  and become more and more important until they peak in mid/late July. After that, they are still very important but less important even as they start falling because the biggest change in demand for natural is always the result of big changes in temperatures which cause a big change in residential cooling or heating needs.

Despite CDD’s being a big deal in the Summer, especially during widespread major heat waves, they pale in the power to move the market compared to HDD’s in the Winter.

This is one of the reasons that we usually have injections that add to supply, sometimes big ones (+100+) during the Summer and withdrawals, sometimes huge ones during the Winter (-200+).

So temperature forecasts are much more important during the Winter but we have started the cooling degree season. 

 Look for the big/huge injections to continue this Spring. We've quickly gone from a deficit vs 2018 to a surplus(for the time in a long while). Next up, a surplus vs the 5 year average which will take until early Summer to accomplish, depending on the weather. 

Summary

Working gas in storage was 1,462 Bcf as of Friday, April 26, 2019, according to EIA estimates. This represents  a net increase of 123 Bcf from the previous week. Stocks were 128 Bcf higher than last year at this time and 316 Bcf below the five-year average of 1,778 Bcf. At 1,462 Bcf, total working gas is  within the five-year historical range.

 For information on sampling error in this report, see Estimated Measures of Sampling Variability table below. 

Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2014 through 2018. The dashed vertical lines indicate current and year-ago weekly periods.

Last Thursday: WOW, the injection was  huge at +123!!!                

                                         NGI:  Natural Gas Futures Hit Reverse as Triple-Digit EIA Build Tops Consensus                                                                                                

https://www.investing.com/economic-calendar/natural-gas-storage-386

Latest Release May 02, 2019   Actual123B   Previous  92B

These were the temperatures for the 7 day period ending the previous  Friday that went into last Thursdays report.  Very warm, so not much residential heating demand, resulting in the huge injection.

These were temperatures for the 7 day period being used for this Thursdays report. They ended last Friday.

We had some/more  CDD's in the Southeast and more HDD's in the Upper Midwest and points westward, so the injection will not be as big this Thursday.

This seasonal price chart below is for 2 decades, ending back in 2009. Not sure on what they use exactly to make their calculations but I've been following seasonal patterns since the early 90's(I paid thousands of dollars in the 90's to get seasonal charts for every commodity updated every 2 years) and this graph does a nice job at capturing the seasonality of natural gas.

The point of showing it is to show that natural gas has a strong historical tendency to go up after mid February.

The lows in Feb., WERE perfectly timed with a typical, end of Winter low, which is followed by increasing prices over 80% of the time into early Spring. 

However, this year has been a noted exception/aberration.  Fundamentals are very bearish........note the price  stayed fairly low even though storage was much less than the 5 year average.....because the market felt very comfortable...... and has been projecting additional storage gains from supplies gushing in......and the market was right.

Expectations for Bearish EIA reports ahead may continue to keep contra seasonal pressure on natural gas prices, which is hanging out near the recent lows.

These natural gas price charts aren't the greatest but they did show a likely seasonal, double  bottom............which we violated with gusto last week as we spiked to  new lows from huge storage injections ahead.. 

Record late season withdrawals last April......2018 have only made the big injections that much more bearish on the year to year comparisions. So we have experienced something that's extraordinarily rare in the month of April-new lows(maybe has happened only once during the last 2 decades).

As we head into the 2nd week of May ng prices continue close to the recent lows, even with seasonals in most years, helping to support prices.

NG 7 days

Natural gas 3 months below

From Natural Gas Intelligence on Monday Morning:

Weekend Forecasts Showed Less Cooling Demand as Natural Gas Futures Called Lower

       8:52 AM

NGI Monday close:

Natural Gas Futures Continue Slide as Market Still Waiting on Summer Heat

Lacking inspiration from a forecast showing weak weather-driven demand well into the month of May, natural gas futures sold off for the third straight session Monday. In the spot market, Rockies prices strengthened on calls for chilly, stormy conditions, while more pipeline maintenance prompted West Texas discounts; the NGI Spot Gas National Avg. rose 4.0 cents to $2.145/MMBtu.

NGI: Overnight Guidance Mixed as Natural Gas Futures Called Slightly Higher

Tuesday closing comments from Natural Gas Intelligence:  

Natural Gas Bears Pause For Breather as Futures Post Small Gain

     5:32 PM    

After driving prices lower the previous few sessions, natural gas bears took a break Tuesday as prices notched a small increase despite an uninspiring forecast. In the spot market, some springtime snow and chilly temperatures accompanied further gains in the Rockies as shoulder season conditions resulted in minimal day/day adjustments for most other regions; the NGISpot Gas National Avg. added 6.0 cents to $2.205/MMBtu

NGI  Wednesday morning: Hints of Late-May CDDs, Production Dip Support Early Natural Gas Futures Gains

metmike: The potential for the heat ridge in the Southeast to magnify late in week 2 is elevated.

Natural Gas Intelligence after the close on Wednesday:

Production Data Seen Fueling Natural Gas Futures Rally; Cash Mixed on Stormy Pattern

     5:24 PM    

The timing of the season’s first significant summer cooling demand remained an open question Wednesday, but that didn’t stop natural gas futures from rallying sharply, helped by a reported drop in production. In the spot market, a stormy spring pattern didn’t stir much interest for buyers, and the NGI Spot Gas National Avg. added 0.5 cents to $2.210/MMBtu

NGI morning call: Another Plump EIA Build Expected as Natural Gas Futures Called Lower

EIA Build Seen as Neutral; Muted Response for Natural Gas Futures

                                                                                                                                                                                                                              +85 bcf                                                                                                                                                                                                                                                                        

Summary

Working gas in storage was 1,547 Bcf as of Friday, May 3, 2019, according to EIA estimates. This represents  a net increase of 85 Bcf from the previous week. Stocks were 128 Bcf higher than last year at this time and 303 Bcf below the five-year average of 1,850 Bcf. At 1,547 Bcf, total working gas is  within the five-year historical range. 

                                                                                                                                                                                                                                                  https://www.investing.com/economic-calendar/natural-gas-storage-386                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

Natural Gas Intelligence closing comments:

Coming Off Rally, Natural Gas Futures Post Small Loss; Cash Weak on Stormy Pattern

     5:17 PM    

Coming off a sharp rally the day before, one that seemed to surprise analysts, natural gas futures bulls mostly held their ground..

Friday morning call from NGI: Weather ‘Uncooperative’ as Natural Gas Futures Called Lower

Natural Gas Intelligence, weekly/Friday close:

Natural Gas Futures Rally Said ‘Peculiar’ as Uncertainty Remains Over Arrival of Summer Heat

     5:54 PM    

The latest forecasts showed sustained summer heat could still be weeks away, but that didn’t discourage natural gas futures bulls from driving front month prices higher Friday.

metmike: The GFS products are actually showing some heat in week 2 and this was probably why natural gas was so strong. What do you think Larry? Grant?

metmike said: "The GFS products are actually showing some heat in week 2 and this was probably why natural gas was so strong. What do you think Larry? Grant?"

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 I just noticed this. I think you're right especially about the operational since the GEFS wasn't all that impressive imo. Neither was the EPS.

Thanks Larry,

The Euro ensembles have not had this heat, agreed.