Natural gas
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Started by metmike - May 6, 2018, 10:19 p.m.


I mentioned that the upcoming, early season heat will be a bit bullish for natural gas in our discussion a couple of days ago.

Widespread 90's in the south/southeast(maybe a few records) will have those folks using their air conditioning which burns natural gas to generate the extra electricity.

Re: Natural gas
By metmike - May 6, 2018, 10:30 p.m.
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Highs next Saturday.......... 90's across the south

By metmike - May 7, 2018, 6:40 a.m.
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I can see that when I provide links to weather products,because they are constantly updated and we have very little traffic, that when many people come here days after a timely weather post, they will see a forecast product for a timeframe of many days later ....and it is going to,not match up well.

By metmike - May 7, 2018, 7:04 a.m.
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The heat is looking a bit less impressive here early on Monday.

However, natural gas is up over $400/contract and held strong support of $2.7 overnight/very early this morning.

By WxFollower - May 7, 2018, 11:46 p.m.
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Thanks, Mike. How's the heat potential  looking now compared to this morning?

By metmike - May 8, 2018, 10:29 a.m.
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Hi Larry,

Sorry for not responding earlier. 

Models have not changed much from my perspective. NGI(Natural Gas Intelligence) called natural gas higher this morning: June Natural Gas Called Higher as Medium-Range Forecast Hotter Overnight

However, if anything to me that pattern does not look quite as hot as the weekend and yesterdays maps. 

By metmike - May 8, 2018, 10:40 a.m.
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I did some homework yesterday on natural gas, with regards to the massive supply situation we keep hearing about.

Apparently April supply came in at a whopping 8.0 BCF/day higher than last April. ............even though we entered the month of May at 7.0 BCF/day tighter.

Hugh, you might say?

All the incremental demand that sucked up the extra ng and then some was from a near record cold April in the high population Midwest and East Coast. 

NG had its biggest drawdown for so late in the season(2 weeks ago) and though I haven't done the calculation, up to last weeks bearish surprise/larger than expected, 1st injection, I'm sure that April to that point had accumulated the biggest drawdowns for that month in history.

By metmike - May 8, 2018, 10:48 a.m.
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This explains why low storage, and unusually late drawdowns did not result in a spike higher, as they would have in most years.

Just too much supply out there and the market is looking ahead. 

In fact, because of the over supply, the cash markets have been getting crushed when we don't have serious weather caused demand............dropping below $2 in places. 

In Canada late last week, because of some bottleneck issues from maintenance,  prices actually  went negative........again:

By metmike - May 8, 2018, 11:02 a.m.
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After getting a better handle on the massive supply hitting the natural gas market. The 900 bcf deficit to last year in storage does not look so bullish to me anymore. 

If we have an extra 5.9 bcf in supply this year and 2.0 is soaked up from demand, then we will have an increase of 3.9 bcf  in injections vs 2017, multiply that out thru 184 days of injections and you gain 717 bcf on last year and are almost caught up before next Winter, with an assumption that the massive supply will continue after that.

Additionally, the Rover Pipeline is expected to ramp up the Marcellus/Utica shale capacity by 1.5 bcf in the coming with a mild Summer, we could actually end the season with more natural gas in storage than the previous year!!