Thanks for getting us started again Larry!

We should open a bit higher based on the heat coming this week and the overall warmer week 2 forecast, though as you mentioned the GFS Ensemble is actually cooler.

The individual solutions in week 2 are all over the place and make for great uncertainty but argue for a heat ridge someplace in the south(maybe the Southern Plains?) with a fast flow/jet stream to the north.

The GFS ensembles have the biggest 500 mb positive anomaly in Southeast Canada however.

Ideally, the positive anomaly would be farther south with the heat ridge to maximize heat but this is 2 weeks out and just the GFS. 

I have very low confidence in this solution.

 I think that the Dow futures being down several hundred points is holding down NG to some extent. But also the GEFS being significantly cooler (~2 CDD cooler/day) than the EPS in the 6-15 (near normal vs warmer than normal) is likely a factor, too. The GEFS does tend to have a larger cool bias than the EPS fwiw.

18z GFS ensemble was on the bearish side without any sustained heat in the South or East in week 2.

I agree that that the DOW being lower is a factor too Larry.

Other factors too we can consider.

Big drop in exports/demand.

Seasonals from now into early August are usually very weak, despite CDD demand ramping up. However, NG has NOT been following the seasonals, which are usually in a strong up mode during Spring.

Last Thursdays report

Weekly Natural Gas Storage Report

 for week ending June 5, 2020   |  Released: June 11, 2020 at 10:30 a.m.   |  Next Release: June 18, 2020 

                                                                                                                                                                         +93 BCF neutral to  a  bit bearish                                                                                 

Summary

Working gas in storage was 2,807 Bcf as of Friday, June 5, 2020, according to EIA estimates. This represents  a net increase of 93 Bcf from the previous week. Stocks were 748 Bcf higher than last year at this time and 421 Bcf above the five-year average of 2,386 Bcf. At 2,807 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. 

Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2015 through 2019. The dashed vertical lines indicate current and year-ago weekly periods.

Latest Release Jun 11, 2020  Actual93B    Forecast93B    Previous102B

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

Temps ending the Friday before last, 6-7-20  for the 7 day period for this last EIA.

HOT Plains and Rockies but not many people live there.

7 day temps ending this last Friday for this next EIA report on Thursday at 9:30am.

Very warm Plains, to Ohio Valley to Mid Atlantic/Southeast.

Not that seasonals matter here but ng seasonals are coming off one  of their strongest periods of the year(and we went in the opposite direction) headed into a weaker period..........from late June, thru July.

Prices are historically low already but if July ends up cooler than average(not my forecast) it would add additional potential selling pressure. 

https://charts.equityclock.com/natural-gas-futures-ng-seasonal-chart

Natural Gas rig count was at the lowest in history the week before last week, at 76.........2 less than the record low in the Summer of 2016.

However, last week, we saw the first increase in the rig count in 5 months. +2 to 78 rigs.

https://ycharts.com/indicators/us_gas_rotary_rigs

Short-Term Energy Outlook

https://www.eia.gov/outlooks/steo/report/natgas.php

EIA estimates that total U.S. working natural gas in storage ended May at almost  2.8 trillion cubic feet (Tcf), 18% more than the five-year (2015–19) average. In the forecast, inventories rise by 2.1 Tcf during the April-through-October injection season to reach more than 4.1 Tcf on October 31, which would be a record.

In May, the Henry Hub natural gas spot price averaged $1.75 per million British thermal units (MMBtu). EIA forecasts that relatively low natural gas demand will keep spot prices lower than $2/MMBtu through August. However, EIA expects prices will generally rise through the end of 2021. EIA expects that natural gas price increases will be sharpest this fall and winter when they rise from an average of $2.06/MMBtu in September to $3.08/MMBtu in January. Despite EIA’s forecast of record end-of-October storage levels, EIA expects that rising demand heading into winter, combined with reduced production, will cause upward price pressures. EIA forecasts that Henry Hub natural gas spot prices will average $2.04/MMBtu in 2020 and $3.08/MMBtu in 2021.

EIA forecasts that U.S. liquefied natural gas exports will average 5.6 Bcf/d in the second quarter of 2020 and 3.7 Bcf/d in the third quarter of 2020. EIA expects that U.S. liquefied natural gas exports will decline through the end of the summer as a result of reduced global demand for natural gas.

Natural Gas Price Fundamental Weekly Forecast – Demand Destruction Continues to Outpace Supply Drops

Even if heat hits large areas of the Lower 48 during the second half of June, it’s going to be hard to sustain a rally

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-weekly-forecast-demand-destruction-continues-to-outpace-supply-drops-655137

James Hyerczyk

9 hours ago (Jun 14, 2020 9:02 PM GMT)

Natural gas futures finished lower last week as bearish news continued to dominate the trade. Sellers remained in charge, primarily influenced by forecasts calling for cooler temperatures, bulging inventories and declining liquefied natural gas (LNG) demand.

Weather and LNG Concerns Guiding Prices Lower

According to Bespoke Weather Services, in the near term, weather patterns have shifted modestly cooler for the weekend and into early next week. At the same time, LNG volumes slipped, and the latest storage injection pointed to a long slog, dependent in part on consistent heat over the summer, to bring supply and demand into balance, Natural Gas Intelligence wrote.

As the week ended, daily balance data shifted weaker, “with production marginally higher to end the week, and LNG volumes dipping back under 4.0 Bcf level,” Bespoke said in a note. “Power burns were also revised weaker for Thursday, and while still stronger this week on a weather adjusted-basis than we have seen over the last several weeks, we have still been unable to get demand back to pre-COVID-19 levels, making it difficult any rally.”

Last year, the EIA recorded a 107 Bcf increase in storage for the similar week.

Total stocks now stand at 2.807 trillion cubic feet, up 748 billion cubic feet from a year ago, and 421 billion cubic feet above the five-year average.

Weekly Forecast

"Even if heat hits large areas of the Lower 48 during the second half of June, it’s going to be hard to sustain a rally since commercial and industrial demand is only gradually recovering. Furthermore, even as states ease pandemic-related restrictions, there are reports of a surge in new coronavirus cases throughout the United States in areas that only recently had shown steep declines.

Last Wednesday, the U.S. Federal Reserve suggested the economy may have bottomed in April, but policymakers also said total economic output or GDP, is still expected to shrink by 6.5% this year.

We still expect the major players to sell rallies as long as demand destruction continues to outpace supply drops."

From tallpines thread:

                INO Morning Market Commentary            

                            Started by tallpine - June 15, 2020, 8:04 a.m.            

https://www.marketforum.com/forum/topic/53879/

"Weather models have turned pretty bearish since late Sunday.

Cooler temps, especially in week 2..........after some heat during this current week. When the cooler air approaches this week, it will trigger some big rain in some key areas of the Central Cornbelt, with the epicenter of heavy rains, around the most important state on the planet for grains.........Iowa.

Cooler temps are clearly bearish for natural gas. The European model had been warmer on Sunday but the last 0z run, overnight for instance, lost a massive 8 Cooling Degree Days!"

From Natural Gas Intelligence:

Natural Gas Prices Steady Early as Forecast Seen Slightly Cooler

       9:00 AM

1.674 had been the contract low for July natural gas from June 9th, last week which had been a ferocious spike lower that lasted seconds, followed by a recovery last week, probably tied to some heat coming up with week............ but we worked our way back down since last evenings higher open........with models, especially the European model taking out all the heat for the high population centers after this week.

We just dropped below that, with the new contract low of 1.661!

Natural Gas Intelligence after the close:

Another Notable Decline for Natural Gas Futures as Heat Holds off, Coronavirus Impacts Endure

metmike: European model cooled off overnight, then even more this afternoon. Temps are clearly bearish for natural gas now.

NGI Tuesday morning:

Natural Gas Futures Called Lower as Market Fundamentals ‘Shaping Up to be Supply Heavy’

Metmike: Not enough heat for AC demand in the high population centers after this week.

NGI after the close Tuesday:

Natural Gas Futures Continue Downward Spiral on Weak Cash Demand, Uncertain Outlook for Weather, LNG

     5:14 PM    

Cooler temperatures and soft demand in the natural gas cash market, along with ongoing liquefied natural gas woes, weighed down futures again Tuesday, with prices hitting a new daily low in June for a third consecutive trading day.

metmike: Not enough heat in the forecast after this week!

1.515, here we come.

Natural Gas Futures Close to Even Early as Analysts Monitor Weakness in Cash Market

     9:00 AM    

A somewhat hotter-trending forecast overnight lent some support to natural gas futures as prices hovered close to even early Wednesday. The July Nymex contract was unchanged at $1.614/MMBtu at around 8:45 a.m.

Wednesday after the close:  Natural Gas Futures End Rut, Post Gains on Lower Storage Build Expectations, Hotter Outlook

Forecasts for modestly increasing heat and a lower inventory build report offset enduring uncertainty about liquefied natural gas (LNG) demand, helping natural gas futures post gains Wednesday and ending a drubbing that cost the July contract nearly 20 cents over the prior three trading sessions.

Weather Wednesday............. heating up late week 2, especially Plains and Upper Midwest.

https://www.marketforum.com/forum/topic/53970/

-85 BCF..........right on target!

Weekly Natural Gas Storage Report

 for week ending June 12, 2020   |  Released: June 18, 2020 at 10:30 a.m.   |  Next Release: June 25, 2020 

Summary

Working gas in storage was 2,892 Bcf as of Friday, June 12, 2020, according to EIA estimates. This represents  a net increase of 85 Bcf from the previous week. Stocks were 722 Bcf higher than last year at this time and 419 Bcf above the five-year average of 2,473 Bcf. At 2,892 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. 

Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2015 through 2019. The dashed vertical lines indicate current and year-ago weekly periods.

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

Thanks for another Thursday! Here's your weather: https://www.marketforum.com/forum/topic/54067/

NGI after the close:

Natural Gas Futures Flat Following On-Target Storage Build, Ongoing Coronavirus Fallout

       4:59 PM

metmike: The extended forecast may start turning hotter.

It's been really nice here in Alabama so far this month, with daytime highs in the mid to upper 80's, and overnight lows in the 60's. But quite unusual for us in June. More like it usually is in the first part of May.

But I agree. It's got to start turning warmer. It would also help if industry and exports would reopen as well. Imagine the rally.

Thanks Mark,

The heat has been farther west so far this cooling season.

Week 2 overnight really increased the heat on the GFS products, especially in the Plains, spilling into the Midwest.

NGI: Natural Gas Called Slightly Higher as Weather Trends Hotter; LNG Weakness Loosens Market

       9:00 AM

 Here's your weather.........hotter GFS products overnight: https://www.marketforum.com/forum/topic/54125/

July Natural Gas Futures Climb Back Into the Green on Increased Heat Outlook

     5:29 PM    

After finishing flat a day earlier, Natural gas futures mustered new momentum on Friday, ending the week in positive territory as mid-range forecasts for more heat outshined persistently weak demand for liquefied natural gas (LNG) amid fallout from the coronavirus pandemic.

US Natural Gas Rig Count:

75.00  for Wk of Jun 19 2020

https://ycharts.com/indicators/us_gas_rotary_rigs

US Natural Gas Rig Count is at a current level of 75.00, down from 78.00 last week and down from 181.00 one year ago.  This is a change of -3.85% from last week and -58.56% from one year ago.

Super Saturday to You!

Not as hot in week 2 compared to Friday on weather models.

 Here's your weather: https://www.marketforum.com/forum/topic/54222/

Not quite as hot late week 2 as Friday:

https://www.marketforum.com/forum/topic/54269/

A little late but fwiw:

CDD comparisons for12Z today vs 12Z Fri:

GEFS: -1

EPS: -3

 So, slightly bearish despite NG being up a little. Then again NG is still very cheap right now and regardless there appears to be plenty of heat on the way for the 6-15 day period in especially the Midwest and NE US.

Thanks Larry!

NG has plenty of heat but the Southeast is not all that hot and its not hotter than last Friday.

Really not that much change since last Friday, though the last, 06z GFS products were COOLER and pressured us back to the lows earlier this morning.

Where will the heat ridge be later in week 2?

NGI from this morning:

     8:54 AM    

Hotter weather trends over the weekend and an increase in liquefied natural gas (LNG) feed gas demand lifted natural gas futures prices in early trading Monday. The July Nymex contract was up 3.1 cents to $1.700/MMBtu at around 8:35 a.m. ET. 

Mike,

 I'm sure based on your comments that you agree with me that the NGI idea that hotter trends lifting NG this morning is debatable. Even I said that yesterday's 12Z models were slightly cooler overall on a day by day comparison of CDDs over the 2 week period vs 12Z on Fri. And then later the 0Z/6Z GEFS were even cooler as you noted though the 0Z EPS was ~1 CDD warmer than its prior run but still making it -2 CDD vs Fri at 12Z.

 I still think that there is just too much heat for the mkt to ignore with prices so low even with the SE near normal and a large injection expected to be reported this week. On a nationally weighted basis, there's no doubt in my mind that we're about to have well above normal CDDs.

 But again, the NGI headline of otter trends looks inaccurate to me. It already looked hot Friday.

Exactly Larry!

You read my comments loud and clear that we were NOT hotter than Friday as NGI told us. In fact, I noted the COOLER 06z GFS products pushing us to the lows.

We bounced back to the highs before the 12Z GFS products came out even COOLER and now we broke out to the downside, below the previous lows. The ensemble had 8 less CDD from the previous run and 10 less from the one before that, 0z run.

The heat ridge keeps backing out farther west and taking some of the heat with it.

To maximize the affect of the heat, it needs to push farther southeast, where more people live and use AC thats generated from burning NG.

If the European model came out hotter, this would be a nice spot to be long from but the trend has been in the opposite direction which is why we are lower.

Not your favorite model but the 12z Canadian model was also cooler.......I only glanced at late week 2.

Larry,

I realize that you made your comments BEFORE the much cooler GFS Ensemble came out and caused the price to plunge thru the previous lows from yesterday evening and earlier this morning..........where we are right now.

I would have been in agreement with you at that time and thought the lows might hold, for instance, with so much heat on the way. ...if models did not turn cooler.

Still plenty of heat and it might just be a knee jerk reaction down that recovers if the Euro stuff comes out warmer. 

However, if the Euro stuff comes out cooler, we WON'T be going back up today.

This is one reason that Ive been LESS bullish ng today than Friday. Note the positive anomalies on this chart are in the Canadian Rockies and points southward. That is NOT a hot pattern for the Eastern US.

NGI after the close Monday:                 

Shifts in Weather, LNG Outlooks Sap Momentum for Natural Gas Futures; Spot Prices Surge

     5:23 PM    

An early rally Monday on expectations for increasing heat across much of the Lower 48, including temperatures in excess of 100 over swaths of the West Coast, fizzled in afternoon trading after a new mid-range weather outlook disappointed. The latest American model still showed near-term heat but cooler-than-previously-expected forecasts for early July that could reduce cooling degree days (CDD)

Better late than never with the Monday Weather (-:

Not as hot in week 2 for the last few model solutions of the GFS  https://www.marketforum.com/forum/topic/54336/

NGI Tuesday Morning:

Outlook for Heat Weakens Overnight as Natural Gas Called Slightly Lower

     9:00 AM    

Natural gas futures were down slightly in early trading Tuesday as the overnight forecasts advertised a somewhat cooler outlook for later this month into early July. The July Nymex contract was down 0.9 cents to $1.655/MMBtu at around 8:45 a.m. 

Terrific Tuesday To you! A bit cooler yet overnight but the heat ridge could still come back north again.

Here's your weather: https://www.marketforum.com/forum/topic/54336/

Wonderful Wednesday to you! Heat is on the way!

Heat in the forecast but not in the South and East where most of the people live to maximize bullishness of natural gas.........but the weather is NOT bearish.

https://www.marketforum.com/forum/topic/54463/

NGI: With Extreme Heat Yet to Materialize and Big Storage Build Expected, July NatGas Futures Extend Slide

     5:22 PM    

Natural gas futures traded in a narrow range most of Wednesday, as markets weighed the prospects of heat-driven demand against continued liquefied natural gas (LNG) export weakness. But the prompt month ultimately finished in the red, dragged lower along with bearish storage injection estimates

I'm gaining confidence in a building heat ridge/dome late in week 2, from the S.Plains and points northeast and even east.

This will defeat rain making in a large area and create 100 degree heat in areas close to the center.

It could define the pattern for July!!!

Potential Triple-Digit EIA Build Weighs on Natural Gas Futures Early

     9:00 AM    

Extending the previous session’s losses, natural gas futures were down several cents in early trading Thursday as the market prepared for the release of government storage data expected to show a plump triple-digit injection. The July Nymex contract was down 4.1 cents to $1.556/MMBtu at around 8:45 a.m. ET. 

metmike: Below are the 7 day temps for last week(average)  and this period's EIA report. When its relatively cool compared to average in the Summer/cooling season,  where all the people live, you don't use much electricity for air conditioning that is generated by burning natural gas..........and you have big injections into storage.

It was hot in the Plains but not as many people live there.

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending June 19, 2020   |  Released: June 25, 2020 at 10:30 a.m.   |  Next Release: July 2, 2020 

   +120 BCF in mid June is off the charts bearish!                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Summary

Working gas in storage was 3,012 Bcf as of Friday, June 19, 2020, according to EIA estimates. This represents  a net increase of 120 Bcf from the previous week. Stocks were 739 Bcf higher than last year at this time and 466 Bcf above the five-year average of 2,546 Bcf. At 3,012 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. 

Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2015 through 2019. The dashed vertical lines indicate current and year-ago weekly periods.

NGI mid morning:

Natural Gas Futures Dive Lower After Triple-Digit Storage Injection Beyond ‘Worst Expectations’

      11:26 AM

Weather is NOT bearish ng right now. Just not bullish ENOUGH to offset mega bearish fundaments!

https://www.marketforum.com/forum/topic/54531/

NGI after the close on Thursday:

July Natural Gas Futures Plummet Following Triple-Digit Storage Build Far Ahead of Expectations

     5:33 PM    

Natural gas futures plunged Thursday after a hefty storage injection that easily surpassed the high end of analysts’ expectations and magnified supply/demand imbalance worries amid a coronavirus pandemic that has crippled economic activity and dwindled U.S. exports

NGI:

Natural Gas Futures Continue Lower as Market Mulls ‘Just Ugly’ Storage Print

As analysts pointed to this week’s hefty storage injection as evidence of a loose market, natural gas futures extended their recent losses in early trading Friday. The expiring July Nymex contract was down 3.6 cents to $1.446/MMBtu at around 8:40 a.m. ET. August was off 1.2 cents to $1.534. The U.S. Energy Information Administration (EIA)…

metmike: The front month, July expires today so a spike higher(lower) is not out of the question. Actually, we've seen the lows, then the highs in the last hour.

Early this morning, the Aug ng dropped down to yesterdays low, 1.517, then held and we are at highs for the day. With the heat INCREASING in the extended forecast, this could mark a reversal higher if we close up today.

Those lows were also, easily life of contracts lows because of the super, mega bearish EIA storage report on Thursday. 

Between the big injection, the slightly bullesh weather, and the coming dust cloud that I think will hamper the weather situation, and very low exports, we may be swimming around the bottom for a little while. At least until the heat ridge moves east. But when it does takes off, it will probably run like fire. 

For sure Mark!

It makes major heat waves less important.

When the amounts gushing into storage will more than offset modest heat, the affect of modest heat is just to make is LESS BEARISH.

However, extreme heat, like +5  F or more over the high population areas for a week(in July-its tough to have anomalies greater than that in the Southeast) would be enough for some kind of a bounce.

But it needs to include the South and East.

Also, seasonals are very weak from mid June thru July.........even in some years with modest heat.;

I just checked historical records/charts and ng prices for the Summer months are trading far below any other year going back to 1990.

After witnessing what happened to crude oil in April, when it went to -$40 when the May contract was expiring, one can't use history to guide our expectations in this unprecedented environment.

NG producers have more control of the supplies, vs crude oil that ran out of a place to store it, even as barges loaded with oil needed a home for it. Oil is more global and we can't control Russia or Saudi.

It seems unlikely that NG supplies would keep gushing in this Fall, if storage is almost full..........actually WHEN storage is almost full but we have seen spot prices spike to negative in ng in some locations for a very brief time.

 Here's your hot Friday weather discussion: https://www.marketforum.com/forum/topic/54605/

Hot week coming up and possibly beyond! Here's your Sunday weather: https://www.marketforum.com/forum/topic/54722/

Sunday PM update: Euro is hottest yet for week 2. Vast heat ridge dominating much of the country.