Thanks for starting a new thread Mark!

Natural Gas Futures Close to Unchanged Early; ‘Bullish Setup’ as Massive Draw Expected

Oops, sorry. Mike, as this should go here/my bad:

 As of 12Z Sun vs 12 Fri, I have the main models a bit warmer day by day although the GEFS appeared to have more of a warmer change vs Fri. All fwiw.

Playing to the short side due to weather. Already ahead 20 pts. Looking for another entry. 

Good trades!!

Thanks guys! March Natural Gas expires on Wednesday. Wild spikes up or down are known to happen ahead of expiration.

Warmer Forecasts, Returning Production Sink Natural Gas Futures Early

 Natural gas futures were down sharply in early trading Monday, pressured by a warmer weather outlook and production coming back online following last week’s cold-related disruptions. The March Nymex contract was down 13.8 cents to $2.931/MMBtu at around 8:50 a.m. ET. Forecasts trended warmer over the weekend, showing a warmer than normal pattern for early… 

I wanted to take some time catching up on other stuff before making this post on ng, which is actually the most interesting by far of any markets I'm following right now.

NG is clearly trading the much milder weather coming up. 

We had a very weak open last night and put in the highs just after that for the NGJ contract and have been under pressure much of the time since then.

The weather for the foreseeable future is pretty bearish.........even beyond 2 weeks.

However, the EIA number this Thursday is going to be an eye popping number. Larry probably has an idea hopefully but the number will be over 300 bcf and the biggest ever for this late in the season and near the top historically.

But the market knows this, even though the bears are not likely to press things to hard ahead of the number.

Also, NGH expires in 2 days..........often a volatile time with spikes in either direction possible.

Also, seasonals very frequently bottom here. It's usually a bad idea to be short ng in March/April without a very compelling reason(COVID was the reason last year) 90% of the time, ng prices go higher during that period.

The technical picture is REAL intriguing. 

NGJ opened very weak, and put in the high of 2.965 shortly after that. Not a gap lower however. The low was set early this morning at 2.865 and we are at 2.906 at the moment, down almost $1,000/contract but almost recovered to mid range.

The NGH front month is down $1,600/contract. The March contract, is usually the last one of the Winter that shows weakness without extreme cold.

The NGJ, when it traded the lows, tested an uptrend going back to the 2.475 low on 1-22-21.  That uptrend has been touched several times now, including this morning. It held each time(which is what makes it an uptrend channel).

This usually means that its very strong. However, cold weather came to the rescue at all the other points when it bounced off the uptrend channel. That won't happen this time..but seasonals and other factors can pitch in to provide support here(EIA number in 3 days).

Also, last week, when we hit 3.060 in NGJ and failed,  we made a double top with the 11-2-20 high of 3.052.

So we have a solid top formation from last week.....very bearish but we are holding the uptrend channel.......bullish. 

The weather is very bearish but the EIA number WILL BE very bullish(but expected/dialed in  when we spiked to 3.060 last week).

Seasonals turn strongly up, especially after the NGH expires in 2 days but it can spike down just before expiration. 

What do you guys have?

U.S. Natural Gas Storage              

           Latest Release  Feb 18, 2021  Actual-237B  Forecast-252BPrevious-171B                

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending February 12, 2021   |  Released: February 18, 2021 at 10:30 a.m.   |  Next Release: February 25, 2021 

  -237 BCF a big number but smaller than expected                                                                                                                                                                                         

Summary

Working gas in storage was 2,281 Bcf as of Friday, February 12, 2021, according to EIA estimates. This represents  a net decrease of 237 Bcf from the previous week. Stocks were 105 Bcf less than last year at this time and 57 Bcf above the five-year average of 2,224 Bcf. At 2,281 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. 

7 day temps for last Thursday's -237 BCF number. Frigid NorthCentral. Anomalies go way off the Violet color on the extreme cold scale.

7 day temps ending last Friday for this Thursdays EIA report. WOW!

Violet includes 30 deg. F below average in parts of Texas.

Coldest for that week ever. Estimates are going to be -300+ BCF. What do you think Larry?

Storage is now below last year at this time(before COVID hit) and after this EIA report, will also be well below the 5 year average. 

Thanks for the great analysis Mike. I agree, this week is going to be rough to trade. Except for weather, everything else is technically bullish. I don't think that March expiring on wednesday is going to have too much sway with the rest of the contracts. We shall see.

Good Trades!!!

Thanks Mark!

Natural Gas Prices Continue to Slide on Post-Storm Recovery

More warming in week 2. Florida turns on air conditioners.  Probably have some chatter as March expires tomorrow. The real day will be thursday.

Mike,

 The EIA week is the 3rd coldest since 1994 with only a week in Jan 1994 (coldest since 1994) and early Jan 2018 colder.

 I think we're likely looking at toward the mid 300s, 2nd largest on record.

Thanks Larry!

Warm Forecast for March Pressures Natural Gas Futures Lower Early

March and April are often very, very strong months, with it  tapering off  in May. Some years, it lasts into early June.

This year, we will start that period with VERY bearish weather.

               Wednesday closing comments:                     

March Natural Gas Expires Lower as Warmth Dominates Weather Forecasts

Thursday morning comments:

Latest Storage Data Highly Anticipated After Deep Freeze; Natural Gas Futures Called Slightly Higher

Weekly Natural Gas Storage Report

 for week ending February 19, 2021   |  Released: February 25, 2021 at 10:30 a.m.   |  Next Release: March 4, 2021 

                                                                                                                                                                                                               -338 BCF                                                                                                           Huge but expected

Summary

Working gas in storage was 1,943 Bcf as of Friday, February 19, 2021, according to EIA estimates. This represents  a net decrease of 338 Bcf from the previous week. Stocks were 298 Bcf less than last year at this time and 161 Bcf below the five-year average of 2,104 Bcf. At 1,943 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 2016 through 2020. The dashed vertical lines indicate current and year-ago weekly periods.

  U.S. Natural Gas Storage     

Latest Release  Feb 25, 2021   Actual-338B   Forecast-333B   Previous-237B                                         https://www.investing.com/economic-calendar/natural-gas-storage-386                                                                                                                                          

Natural Gas Price Action Muted After EIA Reports Second Largest Storage Withdrawal on Record

Rig count continues to climb from the lowest in history. The bottom was 69 in early August 2020.

https://ycharts.com/indicators/us_gas_rotary_rigs

Natural gas headlines Thursday:

‘Powerball’ EIA Storage Report Fails to Stop Natural Gas Price Slide

LNG 

Shell Forecasts Rising LNG Demand as Global Economies Recover, with Supply Shortfall Looming

Natural Gas Production in Texas Dropped 45% Amid Historic Freeze

NGI AM headline: March Weather Looking Meek as a Lamb as Natural Gas Futures Slide

metmike: How much lower can the mild wx push prices when Winter is almost over and seasonals turn strongly up and storage is now BELOW the 5 year average?

If fundamentals are even mildly bullish for 2021, then these prices could represent fair value and inspire some buying.

Since storage has dropped below the 5year avg, we might start seeing some seasonal bullish runs starting next week. A better position for it than last year. Been thinking all morning that it's at the best buying level right now. The next EIA report should show a lot less draw, but may still support a little bullish behavior. We shall see.

Early this morning the NGJ contract tested an uptrend line going back to the 12-28-20 low of 2.308.

The low then/today is 2.707.

NGJ, which is the new front month had a very small gap higher on the open from models being a bit less mild/chillier compared to Friday, mainly in week 1.

It closed the gap quickly but the top of the gap has been short term support.

If the less mild changes would be related to an actual pattern change to colder in week 2 and beyond, I could see us adding to the gains.............considering other bullish factors.

1. We tested/held a 3 month long uptrend line on Friday: https://www.marketforum.com/forum/topic/65814/#66058

2. Very strong/positive Seasonals kick in right about now.

https://www.marketforum.com/forum/topic/65814/#65970

3. Storage has gone from near the highest late in 2020 to below the 5 year average:

https://www.marketforum.com/forum/topic/65814/#65998

4. COVID is getting better and this should increase industrial demand.

Other factors.

5. The rig count has been increasing but is still low:

https://www.marketforum.com/forum/topic/65814/#66118

6. LNG exports will probably be increasing............unsure of this fundamental.

https://www.marketforum.com/forum/topic/65814/#66119

7. Inflationary pressure could be to the upside.

https://ycharts.com/indicators/us_gas_rotary_rigs

Rig count continues to climb from the lowest in history. The bottom was 69 in early August 2020.  We were +1 last week. 

https://www.eia.gov/todayinenergy/detail.php?id=46796

Annual U.S. liquefied natural gas exports forecast to exceed pipeline exports in 2022

Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO)

According to the U.S. Energy Information Administration’s (EIA) February 2021 Short-Term Energy Outlook (STEO), EIA forecasts that U.S. liquefied natural gas (LNG) exports will exceed natural gas exports by pipeline in the first and fourth quarters of 2021 and on an annual basis in 2022. Monthly U.S. LNG exports exceeded natural gas exports by pipeline by nearly 1.2 billion cubic feet per day (Bcf/d) in November 2020, according to EIA’s Natural Gas Monthly. LNG exports have only exceeded natural gas exports by pipeline once since 1998—in April 2020—by 0.01 Bcf/d.

U.S. LNG exports set consecutive monthly records of 9.4 Bcf/d in November and of 9.8 Bcf/d in both December 2020 and January 2021, according to EIA’s estimates based on the shipping data provided by Bloomberg Finance, L.P. EIA forecasts that U.S. LNG gross exports will average 9.7 Bcf/d in February 2021 before declining to seasonal lows in the shoulder months of the spring and fall seasons. EIA forecasts LNG exports to average 8.5 Bcf/d in 2021 and 9.2 Bcf/d in 2022, compared with average gross pipeline exports of 8.8 Bcf/d in 2021 and 8.9 Bcf/d in 2022.  

Since November 2020, all six U.S. LNG export facilities have been operating near full design capacity. In December, the Corpus Christi LNG facility in Texas commissioned its third and final liquefaction unit six months ahead of schedule, bringing the total U.S. liquefaction capacity to 9.5 Bcf/d baseload (10.8 Bcf/d peak) across six export terminals. The November–January increase in U.S. LNG exports has been driven by rising international natural gas and LNG prices, particularly in Asia, and lower global LNG supply because of unplanned outages at several LNG export facilities worldwide.  

Source: U.S. Energy Information Administration, Natural Gas Monthly

U.S. pipeline exports to Mexico increased by 6.4% in the first eleven months of 2020 compared with the same period in 2019 as a result of the completion of a new segment of the Wahalajara pipeline system in June and the Cempoala compressor station in September. The completion of Mexico’s Samalayuca-Sásabe pipeline (0.47 Bcf/d capacity) in January 2021 and the expected completion of Tula-Villa de Reyes pipeline (0.89 Bcf/d capacity) later this year are expected to further increase U.S. pipeline exports to Mexico. 

25 year price chart of natural gas:

https://www.macrotrends.net/2478/natural-gas-prices-historical-chart

Thanks Mike.

Based on the forecast from the NWS for the next 2 weeks, I thought NG would be down tonight.  Impressive.

YW!

Yeah, the 6-10/8-14 day forecasts are pretty mild but there are more HDD's on all the models than Friday and we are in a bullish time of year for ng.

Colder Trends Not Enough to Dispel Bearish Weather Outlook as Natural Gas Futures Slide

April Natural Gas Futures Eke Out Gain on Tail of Strong Cash Prices

Natural gas futures on Monday hovered in a narrow range of gains and losses as traders weighed outlooks for mild spring weather and its dampening effect on domestic demand against a recovery in liquefied natural gas (LNG) levels.

Doesn't look like serious A/C weather yet. Gonna keep the heat turned on for a while longer. Even in the south. Overnight drop of cold air at end of week 2, but warms back up fast the next day.

Was looking at the export charts above. It seems that we pretty consistantly get a drop in export, via both means, from about now til summer. That seems bearish to me, yet it happens during the spring seasonal uptrend. Weather and usage is also in transition. Is it the low storage that drives the seasonal? Because that could explain the lack of the seasonal trend last year. Along with the covid.

Colder Trends for Mid-March Support Early Gains for Natural Gas Futures

metmike: The European ensemble was colder overnight.

NGI Headline Tuesday after the close.

April Natural Gas Futures Climb Higher Amid Solidifying LNG Demand, Lower Production

Natural Gas Futures Hold onto Recent Gains as Forecasts Advertise Cooler Mid-Month Temps

 Continued colder trends for the mid-March time frame lent some support to natural gas futures prices in early trading Wednesday. Holding onto gains from the previous session, the April Nymex contract was up 0.5 cents to $2.844/MMBtu at around 8:45 a.m. ET. As of early Wednesday, the latest weather data again showed colder trends over… 

metmike: That was earlier of course but models are milder to me, especially this last 12z run.

NGI after the close Wednesday:

April Natural Gas Futures Falter Ahead of Storage Report, Looming Spring Temperatures; Cash Cruises

Is it me? Or does it seem that algorithm trading is rising in the NG market? Too many fast decisions/moves happening.