Thanks much Larry, especially for getting us started again for another week of posting on the natural gas market:

Here is the latest weather forecast:

Sunday Weather

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

Monday Weather:

https://www.marketforum.com/forum/topic/30066/

Tuesday Weather:  Heat ridge more impressive

https://www.marketforum.com/forum/topic/30177/

Wednesday: Heat ridge breaks down towards the end of week 2-heavy rain forecasts late this week into early/mid next week.

https://www.marketforum.com/forum/topic/30239/

Weather Thursday: Heat ridge looks impressive into week 2

https://www.marketforum.com/forum/topic/30279/

Friday Weather: Heat ridge is a big deal next week with heat

https://www.marketforum.com/forum/topic/30354/

Saturday Weather:

https://www.marketforum.com/forum/topic/30434/

Sunday Weather:

https://www.marketforum.com/forum/topic/30501/

Monday Weather: Heat ridge this week but changes down the road.........maybe

https://www.marketforum.com/forum/topic/30583/

Previous weekly discussions on natural gas here(dang, this is getting to be long list)

https://www.marketforum.com/forum/topic/29419/

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/

 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. 

+85 bcf last week

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.

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

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

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

                                                                                                                                                                                                                              +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. 

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

We had some/more  CDD's in the Southeast and more HDD's in the Upper Midwest and points westward, so the injection was not as big as the previous week.

These were the 7 day temperatures that will be used for this Thursdays EIA weekly storage report.

Very warm in the East. Very chilly in the Plains, especially N.Plains(where not many people live).

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.

This shows 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 showed some life to the upside late last week.

These natural gas price charts showed a typical seasonal, double  bottom in February............which we violated with gusto last month 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).

We also erased the long lived storage deficit vs the previous year and turned it into a surplus(but still well below the 5 year average)

As we head into the 3rd week of May , there is a bit of heat in the forecast. Expectations of this, caused some upside life to ng prices last week. The market will be reacting to changes in the cooling degree day forecasts this week, thru the rest of the Summer.

NG 7 days

Natural gas 3 months below

End of last weeks discussion:

                By metmike - May 10, 2019, 6:58 p.m.            

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?

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

                   Re: NG week of 5/6/19            

                By WxFollower - May 12, 2019, 5:55 p.m.            

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?"

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

 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.

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

               Re: Re: NG week of 5/6/19            

                By metmike - May 12, 2019, 6:04 p.m.            

Thanks Larry,

The Euro ensembles have not had this heat, agreed.

Natural Gas Intelligence from early this morning: Bearish Lean’ as Latest Weather Data Mixed, Natural Gas Futures Called Slightly Lower

metmike: We had a spike higher shortly after that call. I think from the heat coming up. Overnight, the coolest model the last several days, the European ensembles, added CDD's for each of the last 8 days in the forecast period. 

The problem is that were are seeing a big increase in supplies that will make it tougher to generate real bullish storage reports ahead.

Natural Gas Intelligence closing comments:

Natural Gas Futures Steady as More Range-Bound Trading Expected; Northeast Cash Gains on Cold

     5:15 PM    

Natural gas futures turned in a range-bound day of trading Monday, with bulls briefly testing a key resistance area only to see prices settle close to even. In the spot market, chilly weather and precipitation spurred widespread gains at points throughout the populated Northeast; the NGI Spot Gas National Avg. jumped 14.5 cents higher to $2.300/MMBt

Per DJ Newswire, NG rose Tuesday AM "as cold temperatures in much of the country boost demand."

My thoughts: The current chill should have been dialed in last week but who knows?

 Here's another aspect to consider, the comparison of 0Z Tue to 0Z Mon 2 week ensemble run DD:

GEFS: HDD -2; CDD +8

EPS: HDD 0; CDD +1

 So, regarding the changing wx, IF anything were a bullish factor this morning, it should have been changes in forecasted CDDs. That's my take fwiw.

That's exactly how I've been playing it based on the more impressive heat ridge. Especially the GFS ENS 06z run in week 2 which spiked us higher early this morning. So was the 0z GFS ensemble mean, 6 hours before that.

the 18z GFS yesterday evening was pretty hot in week 2 also.

The 12z GFS came out hotter in week 2 until the very end.

Also wetter as a result of the changes.

Natural Gas Intelligence after the Tuesday close:

Production Dip, Demand Gains Power Natural Gas Futures Rally

     5:28 PM    

Natural gas futures rallied several cents Tuesday, aided by an uptick in anticipated weather-driven demand and a dip in daily production estimates. Spot prices, meanwhile, were mixed, as declines in the Northeast countered gains further west; the NGI Spot Gas National Avg. added 0.5 cents to $2.305/MMBtu.

I think much of this over the past several trading days is the big heat ridge in the Southeast half of the country. This is surely going to increase cooling demand a great deal above average.....with injections not as big later this month/early June.

NGI Wednesday Morning:  Cooling Demand, Production Data Still Supportive as Natural Gas Futures Steady

metmike: Late week 2 cooling put pressure on natural gas.

Thursday Morning:

Natural Gas Futures Steady as Market Eyes Potential Triple-Digit Injection

Weekly Natural Gas Storage Report

 for week ending May 10, 2019   |  Released: May 16, 2019 at 10:30 a.m.   |  Next Release: May 23, 2019 

           +106 bcf                                                                                                                                                                                                                                                                                                                                                               

Natural Gas Intelligence after the close on Thursday:

Another Big EIA Build, But Natural Gas Futures Rebound as Summer Heat Nears

With summer heat in the offing for the Southeast and Mid-Atlantic next week, natural gas futures rebounded Thursday as traders brushed off government storage data that continued the recent run of above-normal inventory builds. In the spot market, prices mostly pushed lower, with the largest declines recorded in California, West Texas and the Northeast; the NGI Spot Gas National Avg. dropped 5.0 cents to $2.160/MMBtu.

The June Nymex futures contract settled 3.8 cents higher at $2.639 Thursday as the bulls reclaimed some of the ground they’d lost during a 5.8-cent sell-off the previous session. Further along the strip, July added 4.0 cents to settle at $2.674, while August picked up 3.8 cents to settle at $2.689.

“We saw a little rally in prices throughout the curve...despite not really having anything in the dataset that was more bullish day/day,” Bespoke Weather Services told clients after the settle Thursday. Balances could see improvement as more heat arrives, at which point “some upside risk into $2.65-2.70 still very much remains in play.

“The strongest heat comes late next week into next weekend, at which time we will see the chance for numerous record highs in the Southeast,” the forecaster said. “Some spots have a good chance to see a couple of days with highs near 100 degrees, which is very intense for any pattern in late May. Low 90s can be seen up into the Mid-Atlantic as well on the hottest days.”

Models suggest the hotter temperatures won’t be “unending” like the pattern observed last year, with recent data “showing the heat relax as we head toward early June,” according to Bespoke.

Meanwhile, the Energy Information Administration (EIA) on Thursday reported an on-target 106 Bcf weekly injection into U.S. natural gas stocks, and futures gained following the news.

The 106 Bcf figure, covering the week ended May 10, compares with a 104 Bcf build recorded in the year-ago period and a five-year average 89 Bcf injection.

Estimates prior to the report had EIA unveiling a low-triple-digit build in line with the actual number. Major surveys had pointed to a 104 Bcf build, with predictions ranging from 93 Bcf to 125 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Wednesday at 105 Bcf, while NGI’s model predicted a 102 Bcf injection.

Bespoke viewed the EIA report as neutral, with the final injection matching the firm’s prediction and generally matching the consensus.

“Balance-wise, this is tighter than last week’s 85 Bcf build,” Bespoke said, estimating that recent balances would put the market on track to end the injection season with 4.0 Tcf in the ground. Still, “weather adjusting can be more difficult in these low demand times of the year. While 4.0 Tcf is probably unrealistic, it shows that we still need to see material improvement in balances to avoid a large storage total heading into winter.”

Total Lower 48 working gas in underground storage stood at 1,653 Bcf as of May 10, 130 Bcf (8.5%) above year-ago levels but 286 Bcf (minus 14.7%) below the five-year average, according to EIA.

By region, the South Central posted the largest weekly injection at 32 Bcf, including 25 Bcf into nonsalt and 6 Bcf into salt stocks. The East injected 31 Bcf, while the Midwest injected 27 Bcf. In the Pacific, EIA recorded a 12 Bcf build, while 4 Bcf was refilled in the Mountain region for the week.

The 106 Bcf build implies the market was 0.1 Bcf/d looser than last year after adjusting for weather, according to Raymond James & Associates analysts. By their estimate the market has averaged 2.0 Bcf/d looser over the past four weeks.

Analysts with Jefferies LLC observed that the past six weeks have “certainly given storage a head start before we enter the hottest parts of summer, with all April/May injections above average.”

By the Jefferies team’s count, the recent run of hefty builds has nearly cut the deficit to the five-year average in half since the end of March.

“The six injections have totaled 523 Bcf, 75% above the five-year average and around 70 Bcf higher than the second highest year on record,” according to Jefferies. “While the two May injections have both been above average, demand has returned to more normal levels this month, with the aggregate May injection just 20% above average (and in line with prior year levels) versus April injections around 140% above average.”

The key drivers behind rebounding demand in May have been cooler weather and liquefied natural gas (LNG) feed gas demand that has reached new highs following maintenance-related reductions in April, according to Jefferies.

“We expect LNG feed gas flows to continue to ramp through the summer, though weather comps set up more difficult year/year as last summer was around 10% warmer versus the five-year average, helping to drive gas power burn to record summer highs,” the analysts said.

Further hinting at a continued ramp up in LNG feed gas demand, recent pipeline scrapes have shown new flows headed in the direction of the Freeport LNG terminal.

On Wednesday, flows on Gulf South’s Coastal Bend Header line showed around 80 MMcf/d of volumes scheduled for delivery at the “Stratton Ridge (To Freeport LNG)” meter, with those molecules possibly bound for the Freeport facility, according to Genscape Inc. analyst Allison Hurley. Scheduled nominations at the location for Thursday remained at 80 MMcf/d.

“Prior to May 15, the only other time this nomination point has posted non-zero scheduled flows was on gas day April 24, with roughly 25 MMcf of gas delivered” to the meter, Hurley said. “Genscape’s power line monitoring at the facility indicates that the facility’s liquefaction engines are not running at this time.

“It is important to note that while nominations from Gulf South at the ‘Stratton Ridge (To Freeport LNG)’ meter allow some visibility into gas deliveries headed toward Freeport LNG, the Stratton Ridge salt dome facility lies just upstream of the Freeport LNG facility” and could be the destination for some part of nominated volumes, the analyst said. “...Genscape analysts also believe that this Gulf South location will be the only reporting interstate pipeline meter where nominations will provide some visibility into Freeport feed gas volumes; additional pipeline connections to the liquefaction facility will be provided via non-reporting intrastate pipelines.”

NGI Friday morning: Market to ‘Move Toward Balance’ Over Summer; June Natural Gas Called Higher

NGI Friday close: 

Natural Gas Futures Mostly Unchanged as Heat Looms, Stocks Build

     5:48 PM    

The natural gas futures market spun its wheels Friday, with traders stuck mulling the prospect of summer demand growth on the one hand and recent bearish storage builds on the other.

sat wx updated

NGI Monday morning:

Natural Gas Futures Rally Early on Record Southeast Heat, Supply Cuts