Natural Gas
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Started by metmike - May 18, 2018, 10:05 a.m.

    

June Natural Gas Called Lower After Thursday’s Rally

     8:59 AM    

The June natural gas contract was set to open Friday about 1.4 cents lower at around $2.845/MMBtu after rallying Thursday despite a larger-than-average Energy Information Administration (EIA) storage report that seemed to offer little support for the bulls

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Re: Natural Gas
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By metmike - May 18, 2018, 11:49 a.m.
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Widespread heat still in the forecast for the next 2 weeks...............bullish as this will increase the amount of electricity needed for air conditioning/cooling (generated from burning natural gas)...........residential demand for ng increases.


Select a Parameter:    

By metmike - May 18, 2018, 11:52 a.m.
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U.S. power grid ready for summer, but California & Texas are concerns: FERC


https://www.reuters.com/article/us-usa-power-reliability-ferc/u-s-power-grid-ready-for-summer-but-calif-texas-are-concerns-ferc-idUSKCN1II2HL


"If the forecasts for warmer than normal weather this summer are correct, the report said gas burned to produce electricity could top 2016’s record high due to the addition of over 16,000 megawatts of new gas-fired generation and low gas prices, making gas a cheaper fuel than coal in many regions."



By metmike - May 18, 2018, 11:57 a.m.
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NWS June and Summer Temperature forecasts released/updated yesterday:


http://www.cpc.ncep.noaa.gov/products/predictions/30day/off14_temp.gif



http://www.cpc.ncep.noaa.gov/products/predictions/long_range/lead01/off01_temp.gif

By metmike - May 18, 2018, 4:23 p.m.
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               Posted under weather thread earlier this afternoon. The hit that ng took after the cooler GFS came out has turned into a small  downside reversal.

By metmike - May 18, 2018, 1:37 p.m.            

                                       


Latest 12Z GFS operational model run has no heat ridge, in week 2,  other than in the Southwest to the far S.Plains. In fact, its actually on the cool side in the East.


 Keep in mind this is just one model run and pretty far out and contradicts most previous guidance(so it might be wrong).

However, ng did take a small hit when it came out:

    





By metmike - May 18, 2018, 4:30 p.m.
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Downside reversal type afternoon price action for natural gas:

This morning, NG had made new highs for this week 2.870 NGM (June) and for this move and going back to March 13th, then we fell back after cooler weather guidance came out around Noon and have continued weaker, down to the lows of the day, now at 2.835.

Also looks like a double top on the charts..........with the mid March highs.

Cooler temps on forecast maps on Sunday would confirm a double top and the reversal lower today. Increase the heat again and we can go higher.


By metmike - May 18, 2018, 4:37 p.m.
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Recently, the Southeast US has featured some of the hottest temps, with the heat ridge located down there.

Week 2 guidance is shifting the heat ridge farther west and actually developing a weak upper level trough in the Southeast, with temps closer to normal or slightly cooler than average.

NG just make a new low for Friday at 2.834, so it is finishing the day near its lows. It will still finish slightly higher for the week.

Temperature Probability

8 to 14 Day Outlook - Temperature Probability

By metmike - May 19, 2018, 11:22 p.m.
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From Friday at Natural Gas Intelligence:                      

Natural Gas Futures Slip After Early-Week Rally; Spot Market Mixed

                                

Jeremiah Shelor

May 18, 2018                                                  

Natural gas futures inched lower Friday after trading in a fairly narrow range, with the market continuing to piece together a storage picture that could see deficits persist deep into the summer. In the spot market, prices fell across markets in the West as Midwest points strengthened following recent declines; the NGI National Spot Gas Average slipped a penny to $2.33/MMBtu.

The June contract slid 1.2 cents to settle at $2.847 after trading as high as $2.870 and as low as $2.840. July settled 0.7 cents lower at $2.879.

“Yet again we saw another slow Friday trading day” after a larger trading range on Thursday when the Energy Information Administration (EIA) issued its weekly storage report, Bespoke Weather Services said. Like the Friday before (May 11), “the strip was more supportive, however, we also saw weather flip significantly more bearish through the day,” on bearish Global Ensemble Forecast System guidance “pulling prices off the $2.87 resistance level we had been watching, and then European guidance furthering these long-range cool trends that we expect to limit cooling demand into early June.”

The market appears “increasingly primed to rally on sustained heat,” which could arrive by mid-June. Although the potential for further gas-weighted degree day declines presents downside risk over the week ahead, with the market potentially testing $2.80 or even $2.75, according to Bespoke.

“From there, downside remains generally limited” particularly as the next week or two “we would expect mid-June heat risks to become more apparent,” the firm said. “Confidence is limited by this supportive strip still, and there certainly are bullish risks, but given softer daily burns and expectations of further cooling demand losses it would appear risk is skewed modestly lower” to start the upcoming week.

NatGasWeather.com said it expects most of the country to remain warm enough through early June to result in “upcoming builds being near five-year averages, essentially stalling deficits and failing to reduce them much over the next three to four weeks.

“We see this providing a bullish background state as the markets were expecting several builds to print greater than 100 Bcf, and that’s looking less likely as the next several come in closer to 80s to 90s Bcf,” keeping deficits close to minus 500 Bcf through the end of the month, NatGasWeather said. “So while production has set fresh records just about every month this year, it’s still not enough to meaningfully reduce deficits this shoulder season, at least not yet.”

EIA on Thursday reported a 106 Bcf injection into Lower 48 gas stocks for the week ending May 11, close to consensus estimates and larger than both last year’s 64 Bcf build and the five-year average 87 Bcf injection.

Analysts with Tudor, Pickering, Holt & Co. (TPH) said based on total degree days for the period the 106 Bcf build indicates the market is oversupplied on a weather-adjusted basis.

“Warmer-than-normal temperatures continue to be expected across the lower U.S.” as cooling demand appears likely to overtake heating demand, according to the TPH team. “If proven accurate, warm weather will become a boon for pricing as we enter the summer cooling season. Nationally, U.S. dry production failed to break past the 80 Bcf/d barrier, Mexican exports remain at around 4.3 Bcf/d” and liquefied natural gas exports were flat week/week (w/w) at about 3.4 Bcf/d.

The 106 Bcf build is tighter versus the previous five years by 1.5 Bcf/d based on degree days and normal seasonality, according to Genscape Inc. analyst Rick Margolin said.

“Relative to the previous week, total power generation was up 17 average GWh. Total renewable generation was down 7 average GWh as wind was down around 9 average GWh w/w and nuclear generation up by 2 average GWh,” Margolin said. “Total thermal generation was up 24 average GWh w/w. Gas generation was up around 16 average GWh for an increase of 3.2 Bcf/d gas burn.”

Meanwhile, production increased by close to 1 Bcf/d day/day (d/d) Friday but couldn’t crack the 78 Bcf/d mark for the fourth straight day, according to Margolin.

“At the same time, demand is posting a nearly equal 0.9 Bcf/d d/d retreat ahead of the weekend,” he said. “The main driver is the Midwest, where nominated demand is down nearly 1 Bcf/d with ANR, NGPL, NNG and Panhandle all posting 0.2 Bcf/d d/d drops with temperatures coming back into seasonal norms.