Thanks much Larry for getting us started again this week!

July Natural Gas expires on Wednesday. This, along with some heat this week is causing a short covering spike higher to start the week.

Residential cooling demand via electricity generated by burning natural gas, is increasing now seasonally and will be the most important  market trading item with potential for big changes because of changes in the weather forecast(cooling degree days)

Sunday Weather: Long advertised new pattern  develops this week. Heat shifts to the(Northern) Plains. Heavy rains ease up but rains don't completely end.

https://www.marketforum.com/forum/topic/33096/

Monday Weather: Same forecast but the European model was hotter overnight.

https://www.marketforum.com/forum/topic/33163/

Tuesday Weather: Same pattern change advertised the past week. Heat moves to N.Plains, not as wet.

https://www.marketforum.com/forum/topic/33246/

Wednesday Weather:  Heat has shifted as predicted. Heavy rains eased up and shifted but still rains.

https://www.marketforum.com/forum/topic/33316/

Thursday Weather:  Same forecast. Hotter today for the Canadian model.

https://www.marketforum.com/forum/topic/33382/

Friday Weather: Same forecast, except the heat ridge backs up west a bit and cools it off some in the Upper Midwest/East.

https://www.marketforum.com/forum/topic/33456/

Saturday Weather: Eastern Cornbelt has dried out, heavier rains Upper Midwest. How long will the heat last? A bit less cooling as far east vs yesterday on the European model. Where will the week 2 heat ridge be?

https://www.marketforum.com/forum/topic/33531/

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

https://www.marketforum.com/forum/topic/32675/

https://www.marketforum.com/forum/topic/32177/

https://www.marketforum.com/forum/topic/31521/

https://www.marketforum.com/forum/topic/31099/

https://www.marketforum.com/forum/topic/30641/

https://www.marketforum.com/forum/topic/30007/

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 injections to continue..........depending on the weather(which may heat up and cause lower, but still big injections).  We've quickly gone from a deficit vs 2018 to a growing surplus. Next up, a surplus vs the 5 year average which will happen  later this year.

Summary

Working gas in storage was 2,203 Bcf as of Friday, June 14, 2019, according to EIA estimates. This represents  a net increase of 115 Bcf from the previous week. Stocks were 209 Bcf higher than last year at this time and 199 Bcf below the five-year average of 2,402 Bcf. At 2,203 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. 

Natural Gas Intelligence  from last Thursday:

EIA Reports 115 Bcf Storage Build, Drops Mic on Natural Gas Futures

Weekly Natural Gas Storage Report

 for week ending June 14, 2019   |  Released: June 20, 2019 at 10:30 a.m.   |  Next Release: June 27, 2019 

                                      +115 bcf-mega bearish                                                                                                                          

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

Latest Release   Jun 20, 2019   Actual 115B   Forecast 107B     Previous 102B

The dominant imposing factor has been massive, record large injections that have increased supplies faster than any time in history and crushed prices.

Looking at the chart below, you can see small bounce during May from expectations of the intense heat in the Southeast, causing some record cooling demand for May in that region.

This week is featuring some heat, so natural has is getting a lift, along with the short covering ahead of the July contract expiration.  The market will be reacting to changes in the cooling degree day forecasts this week, thru the rest of the Summer. As long as there is no extreme heat in the forecast, natural gas can continue lower but widespread heat will give us bounces.

NG 7 days

Natural gas 3 months below

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 to mid June. This years extraordinary, contra seasonal plunge lower has been the result of super duper, huge, injections...records by a wide margin........ that have provided numerous bearish surprises and crushed prices. Cash prices during this period have been below $2 at times.   We are getting close to a time frame when ng seasonals become very negative, from around mid June thru August.

A cool Summer, with currently bearish fundamentals/huge supplies could add to the seasonal pressure. WIdespread, intense heat can give us a good bounce.

Temperatures for the last EIA storage report released on Thursday at 9:30am...........very cool`! Another huge injection!

Temperatures for this Thursday EIA report. 

Cool north, very warm south.

From Natural Gas Intelligence Monday Morning:  

Hotter Forecast Trends for July Boost Natural Gas Futures Early

       8:57 AM

Closing comments from Natural Gas Intelligence:

Volatility Returns to Natural Gas Market as Futures Surge; Cash Rallies Despite Mild Temps

     5:21 PM    

A significantly hotter shift in some of the weather models was enough to help natural gas futures recover more than half of last week’s roughly 20-cent plunge. The July Nymex gas futures contract skyrocketed 11.7 cents on Monday to settle at $2.303. August jumped 11.5 cents to $2.284.

NGI from earlier: Natural Gas Futures Pull Back Slightly After Rally; Forecast Changes Mixed

Don't forget, NGN expires tomorrow, with price spikes like yesterday not unusual as we get close.

NGI Tuesday evening: 

Natural Gas Futures Sputter as Production Reaches Monthly High; Cash Up as Heat Builds

     5:31 PM    

After sharp swings over the last week, natural gas futures tapped the breaks Tuesday as weather models remained fairly intact, trending only slightly hotter overall for the late June/early July period. With production data pointing to the highest output in 30 days, the July Nymex gas futures contract went on to settle at $2.308/MMBtu, a half-cent higher on the day.

NGI Wedneday morning: Natural Gas Futures Called Lower Despite Hotter Overnight Guidance

Front month, July expires today.

+98BCF   Bullish for the first time in many weeks!!

Weekly Natural Gas Storage Report

 for week ending June 21, 2019   |  Released: June 27, 2019 at 10:30 a.m.   |  Next Release: July 3, 2019 

Summary

Working gas in storage was 2,301 Bcf as of Friday, June 21, 2019, according to EIA estimates. This represents  a net increase of 98 Bcf from the previous week. Stocks were 236 Bcf higher than last year at this time and 171 Bcf below the five-year average of 2,472 Bcf. At 2,301 Bcf, total working gas is  within the five-year historical range.

Latest Release  Jun 27, 2019    Actual 98B    Forecast 101B    Previous 115B

EIA Reports ‘Tight’ 98 Bcf Injection into Storage, Futures Rise

Leticia Gonzales  Natural Gas Intelligence

June 27, 2019

The Energy Information Administration (EIA) reported a 98 Bcf injection into natural gas storage inventories for the week ending June 21, snapping a string of triple-digit builds dating back to mid-May and delivering the tightest stat of the summer so far.

The reported injection was within the range of expectations, although consensus was a couple of Bcf higher. The 98 Bcf build compared with last year’s 71 Bcf injection and the five-year 70 Bcf average, according to EIA.

Natural gas futures responded swiftly to the slightly smaller-than-expected injection. The August Nymex contract was trading about 3 cents higher near $2.30 before the EIA’s 10:30 a.m. ET report. As the print hit the screen, the prompt month shot up to $2.327, up about 6 cents from Wednesday’s settle. By 11 a.m., the August contract was trading at $2.319, up 5.1 cents. September was up 5 cents to $2.294.

The 98 Bcf injection was dead on with Bespoke Weather Services’ projection. Balance wise, the build was the tightest the firm has seen “in a long time” and close to the five-year average balance.

“We will have to see if we can sustain this level of tightness, as we must remember a part of this number was the temporary decline of Canadian imports,” Bespoke chief meteorologist Brian Lovern said. “In-week balances this week do not appear as tight as the ones for the report issued today.”

There were no major surprises in the EIA data. A 35 Bcf injection was reported in the Midwest, and 27 Bcf was added in the East. The Pacific injected 11 Bcf, while stocks in the Mountain region rose by 9 Bcf. The South Central region reported an 18 Bcf injection, including a 1 Bcf withdrawal in salt facilities and an 18 Bcf build into nonsalts.

Working gas in storage as of June 21 was 2,301 Bcf, 236 Bcf above last year and 171 Bcf below the five-year average, according to EIA.

Some market observers on Enelyst, an energy chat room hosted by The Desk, said 100 Bcf-plus storage injections may be in the rearview mirror. However, larger-than-normal builds were likely to continue at a slower pace, especially with warmer weather ahead.

Genscape Inc. senior natural gas analyst Eric Fell said gas prices also pointed to increasing liquefied natural gas (LNG) exports. Genscape’s models indicate that forward supply growth is much slower compared to what the market has seen in the last 12-18 months.

“Big picture, assuming normal weather and current prices (including LNG arbitrage, which is way in money for winter), we have demand up quite a bit more than supply winter on winter,” Fell said.

After last weeks big injection I bought a dec contract @ $2.476. I sold an August call against it. My plan is sell a monthly call around the 30 delta range and see how high the dec contract can go. If the price blows through my call strike I will buy back the call and sell the futures contract. As of right now the position makes $80 for every cent NG rises. 

You have a true traders mentality and discipline Grant........and you aren't even using the weather, as a meteorologist for most of your trades!

Thanks for sharing your trades.  I have not been following the December contract but obviously, the price changes will be muted vs the front months so an extreme move up is what you don't want to see. 

With the very bearish supply situation, one would think that's extraordinarily unlikely. 

Prices are pretty low but also, seasonals in July are VERY weak. Each year is different but historically, ng falls much more often than it goes up in July. 

Record heat this year would probably change that. 

Natural Gas Intelligence after the close:

Supportive Storage Stat Lifts August Natural Gas; Cash Slips Despite Widespread Heat

     5:31 PM    

After several weeks of exceptionally bearish data, the latest natural gas storage report renewed optimism for bulls, sending futures prices higher Thursday..

I am hoping it trades sideways for a while. It's best for me for it to stay below $2.40 before expiration. 

NGI Friday morning:

Long-Range Forecast Seen Cooler Overnight; Natural Gas Futures Called Lower

Natural Gas Intelligence after the close on Friday:

Cooler Changes to Long-Term Forecasts Send Natural Gas Futures Lower; Cash Up on Current Heat

After a solid run following supportive storage data, natural gas futures prices fluctuated in and out of positive territory Friday as traders digested slightly cooler long-range weather outlooks. The August Nymex gas futures contract rose as much as $2.364 before going on to settle at $2.308, down 1.6 cents on the day. September also slipped 1.6 cents to $2.282.