Natural Gas week of July 22, 2019
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Started by metmike - July 22, 2019, 8:43 p.m.

Residential cooling demand via electricity generated by burning natural gas, is at its seasonal peak(based on historical averages). It's the most important  market trading item with potential for big changes because of changes in the weather forecast(cooling degree days)

July is usually a weak month for natural gas prices and storage has been making huge gains but we had some near record cooling demand last week which lifted natural gas prices earlier this month..............but the market looks ahead and the cooler weather THIS week, caused ng prices to fall LAST week. 

As we start the new week, we have added alot of heat for the week 2 part of the forecast compared to last week and so natural gas prices started the week with a big upthrust............with expectations for more cooling degree days and stronger demand. 


Weather Sunday: Hotter than last week but also plenty of rain in the extended.

https://www.marketforum.com/forum/topic/34982/


Weather Monday: Still hotter and lots of week 2 rain.

https://www.marketforum.com/forum/topic/35050/


Tuesday Weather:

https://www.marketforum.com/forum/topic/35138/


Wednesday Weather: Cooler week 2, especially late......maybe turning drier.

https://www.marketforum.com/forum/topic/35203/


Thursday Weather: Still cool week 2. Maybe rain picking up then?

https://www.marketforum.com/forum/topic/35253/


Friday Weather: Still cool week 2.....even cooler. Maybe rains picking up week 2............maybe not.

https://www.marketforum.com/forum/topic/35333/


Saturday Weather: Same as Friday

https://www.marketforum.com/forum/topic/35395/


Comments
By metmike - July 22, 2019, 8:46 p.m.
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By metmike - July 22, 2019, 8:48 p.m.
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Weekly Natural Gas Storage Report

 for week ending July 12, 2019   |  Released: July 18, 2019 at 10:30 a.m.   |  Next Release: July 25, 2019 

                                                                                                                                                                                                                          +62 BCF Bullish for the first time in weeks...........but the forecast was cooler and prices dropped.                                                                                                                                                                                                                                                                                                                                                                        

Working gas in underground storage, Lower 48 states Summary text CSV JSN
  Historical Comparisons
Stocks
billion cubic feet (Bcf)
 Year ago
(07/12/18)
5-year average
(2014-18) 
Region07/12/1907/05/19net changeimplied flow  Bcf% change Bcf% change
East561  544  17  17   503  11.5  584  -3.9  
Midwest627  597  30  30   498  25.9  634  -1.1  
Mountain147  140  7  7   144  2.1  169  -13.0  
Pacific268  263  5  5   259  3.5  293  -8.5  
South Central929  927  2  2   839  10.7  996  -6.7  
   Salt246  257  -11  -11   232  6.0  282  -12.8  
   Nonsalt683  669  14  14   607  12.5  714  -4.3  
Total2,533  2,471  62  62   2,242  13.0  2,676  -5.3  

Totals may not equal sum of components because of independent rounding.

Summary

Working gas in storage was 2,533 Bcf as of Friday, July 12, 2019, according to EIA estimates. This represents  a net increase of 62 Bcf from the previous week. Stocks were 291 Bcf higher than last year at this time and 143 Bcf below the five-year average of 2,676 Bcf. At 2,533 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. 

 Working Gas in Underground Storage Compared with Five-Year Range

By metmike - July 22, 2019, 8:50 p.m.
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U.S. Natural Gas Storage

                        Latest Release     Jul 18, 2019     Actual     62B     Forecast 65B     Previous  81B


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

Release DateTimeActualForecastPrevious
Jul 25, 2019 10:30  62B
Jul 18, 2019 10:3062B65B81B
Jul 11, 2019 10:3081B73B89B
Jul 03, 2019 12:0089B85B98B
Jun 27, 2019 10:3098B101B115B
Jun 20, 2019 10:30115B107B102B



These were the temperatures for the 7 day period that corresponded to that 62 BCF injection:

https://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20190712.7day.mean.F.gif

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

Below are the temperatures that corresponded to the 7 days for this next EIA report, released at 9:30am Thursday:

Huge area of above average(+4 deg. F isotherm from the Midwest to the Mid Atlantic where plenty of people live) during the week which historically, averages out to be about the hottest of the year.

How small will the injection be this week?

https://www.cpc.ncep.noaa.gov/products/tanal/7day/mean/20190719.7day.mean.F.gif

By metmike - July 22, 2019, 8:54 p.m.
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The dominant imposing factor for prices this year has been massive, record large injections that have increased supplies faster than any time in history and crushed prices.

The first 2 weeks of July, however featured increasing heat in the extended forecasts, so natural got a huge lift. Cooler forecasts last week(for this week and next) caused priced to plunge again. On July 22nd, prices had a nice pop to start the week with much more heat added to the week 2 part of the forecast as we start the new trading week.

 The market will be reacting to changes in the cooling degree day forecasts thru the rest of the Summer. Widespread heat needs to continue in the forecast to keep prices up here.

NG 7 days

https://nasdaq.websol.barchart.com/?module=chartImage&rawOutput=1&symbol=NG*1&width=450&height=286&startDate=1549311628&endDate=1549916428


Natural gas 3 months below

By metmike - July 22, 2019, 8:57 p.m.
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This seasonal price chart below is for 2 decades, ending back in 2009.

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 now in a time frame when ng seasonals become very negative, from mid/late June thru August.

Widespread, intense heat in the forecast gave us an early July, contra seasonal bounce that went in the other direction last week but now we are up again on July 22nd with more heat in the forecast.  If the heat ends, ng prices could drop back down to the lows or even make new lows, as seen from the previous page.



Natural Gas Futures (NG) Seasonal Chart

By metmike - July 22, 2019, 8:58 p.m.
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Natural Gas Intelligence after the close on Monday:

Hotter Forecast Trends Help Natural Gas Futures Rebound; Cash Stronger Out West

     5:25 PM    

In contrast to last week’s heavy sell-off, natural gas futures rallied Monday on the promise of additional heat arriving later this month. Meanwhile, hotter temperatures helped spark strong spot price gains for much of California and the Rockies; the NGI Spot Gas National Avg.climbed 6.5 cents to $2.075/MMBtu.

By metmike - July 23, 2019, 12:20 p.m.
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From Natural Gas Intelligence Tuesday Morning:

Natural Gas Futures Steady; Forecasts Cool Slightly Overnight

By metmike - July 24, 2019, 12:12 p.m.
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By metmike - July 25, 2019, 12:13 p.m.
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  EIA +36    BCF                                                                                                                                                                                                                                                                                                       From Natural Gas Intelligence:

‘Neutral’ EIA Report Sends Natural Gas Futures a Few Pennies Lower

    11:18 AM    

The Energy Information Administration on Thursday reported an on-target 36 Bcf weekly injection into U.S. natural gas stocks, and futures

                                                                                                                                                                                                                            


 Historical Comparisons
Stocks
billion cubic feet (Bcf)
 Year ago
(07/19/18)
5-year average
(2014-18) 
Region07/19/1907/12/19net changeimplied flow  Bcf% change Bcf% change
East575  561  14  14   524  9.7  604  -4.8  
Midwest650  627  23  23   522  24.5  656  -0.9  
Mountain151  147  4  4   145  4.1  172  -12.2  
Pacific271  268  3  3   256  5.9  294  -7.8  
South Central921  929  -8  -8   823  11.9  994  -7.3  
   Salt229  246  -17  -17   217  5.5  276  -17.0  
   Nonsalt692  683  9  9   605  14.4  718  -3.6  
Total2,569  2,533  36  36   2,269  13.2  2,720  -5.6  

Totals may not equal sum of components because of independent rounding.

Summary

Working gas in storage was 2,569 Bcf as of Friday, July 19, 2019, according to EIA estimates. This represents  a net increase of 36 Bcf from the previous week. Stocks were 300 Bcf higher than last year at this time and 151 Bcf below the five-year average of 2,720 Bcf. At 2,569 Bcf, total working gas is  within the five-year historical range. 

By metmike - July 25, 2019, 12:16 p.m.
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Latest Release    Jul 25, 2019   Actual36B     Forecast37B     Previous62B


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

          

Release DateTimeActualForecastPrevious
Aug 01, 2019 10:30   
Jul 25, 2019 10:3036B37B62B
Jul 18, 2019 10:3062B65B81B
Jul 11, 2019 10:3081B73B89B
Jul 03, 2019 12:0089B85B98B
Jun 27, 2019 10:3098B101B115B
By metmike - July 25, 2019, 9:15 p.m.
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From Natural Gas Intelligence after the close on Thursday:


Neutral’ EIA Report Sends Natural Gas Futures a Few Pennies Lower


"The August Nymex futures contract, which is set to expire early next week, initially sold off on the news. After trading around $2.250-2.260 in the lead-up to the report, once the final number crossed trading screens at 10:30 a.m.ET, the prompt month quickly dropped to around $2.240 before trading as low as $2.229 minutes later."

                    

"By 11 a.m. ET, August was trading around $2.231, up 1.1 cents from Wednesday’s settle but off a few pennies from the pre-report trade.

Prior to Thursday’s report, estimates had been pointing to an injection in line with the actual figure. A Bloomberg survey had showed a median 37 Bcf, while Intercontinental Exchange futures had settled at 35 Bcf. NGI’s model predicted a 33 Bcf injection.

Market observers discussing the EIA report on energy-focused social media platform Enelyst saw the number as unlikely to change the market’s perception of balances."

“Prices are still asleep,” The Desk’s John Sodergreen said. The number fell “within a point or two of consensus, and so, crickets.”

By metmike - July 26, 2019, 10:31 a.m.
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                  Friday morning from Natural Gas Intelligence:

‘Little Reason to Move Higher’ as Natural Gas Futures Under Pressure Early

     8:53 AM    

Further cooler trends in the latest guidance had natural gas futures trading several cents lower early Friday. The August Nymex contract, which expires Monday, was down 4.2 cents to $2.202/MMBtu shortly after 8:30 a.m. ET. September was down 4.4 cents to $2.183. 

By metmike - July 26, 2019, 4:57 p.m.
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NGI after the close Friday:

                  

Natural Gas Forwards Slide, Bid Adieu to Summer Heat

     4:29 PM    

With the core of summer quickly winding down, natural gas forward prices continued to decline during the July 19-24 period as an intense heat wave that had blanketed the U.S. Northeast earlier in the week moved out of the region. August prices shed 6 cents on average, as did balance-of-summer (August-October) prices, according to NGI’s Forward Look. The prompt winter (November 2019-March 2020) was down an average 7 cents, while next summer (April-October) was down just 3 cents on average.