Thanks very much Larry!

Here's the old thread for anybody that wants to review where we came from to get here:

                NG 4/28/21-5/19/21            

                           58 responses |           

                Started by WxFollower - April 28, 2021, 6:39 p.m.            

https://www.marketforum.com/forum/topic/68653/

These were the temps for this weeks EIA report. Very chilly over much of the country, coldest G.Lakes O.Valley. Warm West. Too late in the year for this to cause many HDD's. EIA number should be fairly robust.

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending May 14, 2021   |  Released: May 20, 2021 at 10:30 a.m.   |  Next Release: May 27, 2021 

                                                                                                                                                                                                                                                                                                                                                                                                                                                    +71 BCF Bearish                                                                                                                                                                                                               

Summary

Working gas in storage was 2,100 Bcf as of Friday, May 14, 2021, according to EIA estimates. This represents  a net increase of 71 Bcf from the previous week. Stocks were 391 Bcf less than last year at this time and 87 Bcf below the five-year average of 2,187 Bcf. At 2,100 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

June Natural Gas Futures Dive Lower After Bearish EIA Storage Report

 metmike: Maybe expectations for this big number are why we had the gap and crap bearish buying exhaustion/failure to start the week.

Indeed, that was quite the bearish EIA. It appears that NG struggled through ~2PM CDT, before rallying almost 3 cents since likely due to a significantly warmer 12Z Euro ens vs 0Z.

 Mike, do you agree?

I was going to post exactly that Larry!

I have +6 CDD's from the EE.

June Natural Gas Futures, Cash Prices Skid Further After EIA Storage Report Disappoints

metmike: As mentioned, the early afternoon Euro Ensemble was +6 CDD's of cooling from being warmer that caused us to bounce after the day session close.

Natural Gas Futures Ease Lower Early; Temps Seen Averaging Above Normal

metmike: Actually, the week 2 period of the models(especially the Euro) were cooler overnight.  NG peaked shortly after 2 am, with buying momentum being supportive previous to that from the previously warmer solutions from 12z and 18z on Thu.

Jump in Rig count. 20 Rigs running and I have 1.

Changes from Feb and March 2021 should be considered together due to severe cold of Feb causing curtailment of operations. Current wellhead price for ND Sweet $56.45.

Also BTC / Blockchain has arrived in the Bakken. Flared / stranded natural gas generating the power. More on that later.

Thanks much Joe!

Wow, that cold really caused an impact in Feb/Mar.

I assume that the higher prices are exactly why rigs are going up.

Natural Gas Futures, Cash Prices Slide as Summer Heat Remains Elusive

 A rise in production and the sting of bearish storage data sent natural gas futures prices another leg lower on Friday. The June Nymex gas futures contract closed the week at $2.906, off 1.9 cents day/day. July slipped 1.4 cents to $2.977. Spot gas prices also softened across most of the United States, with early… 

metmike: Week 2 was cooler yet. If this holds or continues over the weekend, look for a gap lower on Sunday Night. Potential downside(bearish) breakaway gap but that's 2 days from now.

https://www.aogr.com/web-exclusives/us-rig-count/2021

U.S. Rig Count

2011  |  2012  |  2013  |  2014  |  2015  |  2016  |  2017  |  2018  |  2019  |  2020  |  2021

Data made available by Baker Hughes..

https://www.aogr.com/web-exclusives/us-rig-count/2021

NG rigs down 1 for the week to 99 but up around 15 since the start of the year and up 31 since the alltime/historic low of 68, last July. 

We got the predicted bearish gap lower tonight on the open.....it was also a weekly gap lower.

https://www.marketforum.com/forum/edit_post/69775/

Open was 2.850, $560/contract lower.

Low was 2.836, high was 2.854. Very tight range for ng. We can go back up but the models need to increase the CDD's overnight.

Otherwise, its a downside breakaway gap.

Closing it with hotter forecasts would be a potential gap and crap downside selling exhaustion. 

Forecasts ‘Abruptly’ Shift Cooler Over Weekend as Natural Gas Futures Extend Losses

 A sharp drop in cooling demand expectations from forecasts over the weekend had natural gas futures tumbling in early trading Monday. The June Nymex contract was down 6.8 cents to $2.838/MMBtu at around 8:50 a.m. ET. Weather models over the weekend “abruptly shifted much cooler” by lowering cooling demand expectations for the eastern half of… 

metmike: Not so abrupt at all. Why do you think we were lower last week and closed near the lows? It was just a continuation and expected based on the close Friday. The 6Z GFS ensemble was actually warmer in week 2 too so we could recover some here. 

https://www.marketforum.com/forum/topic/69687/#69775

We just barely closed the daily/weekly gap lower from last night when we hit 2.894 a short while ago.

This is potentially bullish. At the very least, it just negated the bearish downside break out potential from last nights gap formation.

Likely the warming week 2 forecast did it.

June Natural Gas Futures Dip as Demand Outlook Temporarily Dims; West Cash Cruises

 ·        Forecasts call for cooler conditions next week ·        LNG holds strong, but production ticks up ·        Spot prices advance along with demand in the West Natural gas futures kicked off the trading week Monday on a sour note as forecasted weather demand eased, production ticked… 

metmike: Moderate sized gap lower Sunday Night(from cooling trend last week continuing over the weeked) was barely filled on Monday(as week 2 forecasts look like we may be heating up a bit........ and we are currently trading at the top of the gap.

Natural Gas Forward Curve Shows ‘Resilience’ as Futures Rebound Early

 After largely absorbing the bearish impact of a cooler shift in forecasts heading into the current trading week, natural gas futures rebounded early Tuesday amid signs the market remains optimistic about summer pricing.  The June Nymex contract, set to expire this week, was up 3.4 cents to $2.920/MMBtu at around 8:50 a.m. ET. July was… 

metmike: 6z GFS ensemble was WARMER in week 2 and gave us a short  lived spike higher  after 7am.

June/front month expires tomorrow.

June Heat Lifts Natural Gas Futures Early Ahead of Prompt Month Expiration

 Forecasts showing heat setting up over key demand regions in early June supported higher natural gas futures prices in early trading Wednesday. The expiring June contract was up 3.7 cents to $2.950/MMBtu at around 8:50 a.m. ET. July was up 3.0 cents to $3.004. The latest forecast from Bespoke Weather Services early Wednesday showed warmer… 

metmike: Potential heat ridge coming later in week 2!

https://www.marketforum.com/forum/topic/69635/#69992

These were the temperatures for this mornings MEGA BEARISH EIA report

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending May 21, 2021   |  Released: May 27, 2021 at 10:30 a.m.   |  Next Release: June 3, 2021 

                                                                                                                                                                                               +115 BCF= BEARISH                                                                                                              

Summary

Working gas in storage was 2,215 Bcf as of Friday, May 21, 2021, according to EIA estimates. This represents  a net increase of 115 Bcf from the previous week. Stocks were 381 Bcf less than last year at this time and 63 Bcf below the five-year average of 2,278 Bcf. At 2,215 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.

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

U.S. Natural Gas Storage

latest release from 5-21-21   Actual115B    Forecast104B   Previous71B

July Natural Gas Futures Drop as Triple-Digit Storage Injection Proves Bearish

The EIA number was very bearish but the weather is turning bullish, which has taken us off the EIA lows.

Heat ridge building in week 2. This has also been bullish the grains.

July Natural Gas Futures Contract Slumps to Kick Off Prompt Month; Cash Prices Drop

metmike: Week 2 heat ridge is building so CDD's pretty robust in that period.

Weather Outlook Moves Hotter as Natural Gas Futures Recover Losses Early

metmike: No change. The heat ridge is bullish natural gas.

Widespread heat ridge this week has natural gas prices up strong.

Currently near the highs, around 3.066, up around $800/contract compared to the 1:30pm close on Friday.

June Temps Trend ‘Notably Hotter’ Over Long Weekend as Natural Gas Futures Surge

Natural Gas Futures Prices Soar as June Setting Up to be Hottest on Record

 With a flip of the calendar and a notably warmer outlook for June, natural gas futures prices roared back after the Memorial Day holiday weekend. A sharp decline in supply — though seen as possibly temporary — also influenced pricing, with the July Nymex futures contract settling Tuesday at $3.104/MMBtu, 11.8 cents higher than Friday’s… 

metmike: Hottest on record? Where in the heck are they getting that from? There will be some near record heat in some locations in the northern 1/3rd of the country during the first half of the month and maybe we could end up in the top 10 for the country as a whole or even as high as 6th but this will not be  close to as hot as June 2012, June 1988, June 1954 and several June's in the 1930's.......and those are just off the top of my head and that's only if the forecast heats up from where it is right now. The southern half of the US is just too wet right now and not joining into the heat party for it to be the hottest ever. 

These are the areas with the risk of excessive heat, days 3-15:

June Heat Helps Natural Gas Futures Hold Onto Gains Early

metmike: Heat ridge backing up. Less CDD's putting pressure on the price.

Natural Gas Futures Slip on Rebounding Supply, Weather Model Shifts; Cash Still Rocking

metmike:  Less CDD's in the forecast today for sure, especially week 2 but more like LESS bullish vs bearish. The 12z GFS Ens had a whopping -6 CDD's but we put in the low when that came out, instead of selling off,  after already having sold off all morning.  That solution, however has a potential Bermuda High building in the far Southeast late in week 2, while the other models/European has a trough there. This will be key to how bullish the 2nd half of June can be for ng. The main thing holding us back now is the main heat wave is leaving out the south, which in June can have some massive CDD's. 

Some decent heat in the East last week. The last 2 EIA reports have been solidly bearish. Larry, do you know what the expected injection  is this week?

Weekly Natural Gas Storage Report

 for week ending May 28, 2021   |  Released: June 3, 2021 at 10:30 a.m.   |  Next Release: June 10, 2021 

                                                                                                                                                                               +98 BCF...............Neutral                                                              

Summary

Working gas in storage was 2,313 Bcf as of Friday, May 28, 2021, according to EIA estimates. This represents  a net increase of 98 Bcf from the previous week. Stocks were 386 Bcf less than last year at this time and 61 Bcf below the five-year average of 2,374 Bcf. At 2,313 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.

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

  U.S. Natural Gas Storage   Latest Release     Jun 03, 2021     Actual98B   Forecast95B  Previous115B 

Natural Gas Futures Rise After EIA Reports Sub-100 Bcf Storage Injection

NG was under pressure much of the time since the very early am Euro came out LESS HOT to even cooler in week 2 and the GFS held to that solution thru the morning.

However, the early pm EEnsemble came out hotter by 4 CDD's and so we bounced from the lows the last couple of hours.

Very surprised at the open tonight. I was expecting a gap up.

Actually, the forecast is a decent amount cooler with a cool shot at the end of week 1.

The gFS ensemble at 12z came out the coolest yet with several days below average early in week 2.

I thought for sure we would sell off hard after that came out but there were around 500 lots bid at 3.096/97 that held us up for 2 hours.

Then the European model came out a bit coolr too and we spiked the those orders in 1 second as somebody must have hit the market with some selling at the market with some size. 

The August also had  almost 500 bid in the same spot.....and we must have had a bunch of sell stops just below it.

Now that area is resistance and we are facing a cooler forecast in the east and a bit cooler in the Midwest with the heat ridge backing up and a possible top in ng.

Same thing with the grains but the heat ridge is closer to that area and still not much rain for IA even with the heat ridge backing up for at least several days.

Question now is will it come back in after 2 weeks?

Cooler Weather Pressures Natural Gas Futures Lower in Early Trading

metmike: See description earlier. The heat ridge backs up and allows an air mass with temps below average to surge in but just for several days...........then the heat ridge appears to start returning later week 2.

Pretty impressive for ng to bounce back to being only down a bit after the GFS ensemble dropped 10 CDD's in the forecast overnight.....after already showing signs of being cooler before then.

The market must be pretty threatened by more heat later this month. 

If the 12z models turn hotter, ng can reverse higher.............or if they cool off more then we should go the other way.

The European model was not as cool........added almost 5 CDD's. That caused strength during the last 2+ hours of trading.

The GFS ensemble was actually cooler late in the morning and the market had some selling pressure but held just above 3.05 and was already coming back when the EE came out warmer.

Natural Gas Futures Slip on More Cooler Changes to Forecast, LNG Maintenance

 Natural gas futures opened the week lower as a trifecta of bearish factors, including a large drop in export feed gas demand, brought prices down a couple of notches. The July Nymex gas futures contract fell 2.7 cents to $3.070. August fell 2.5 cents to $3.089. Spot gas prices were higher, however, as heat blanketed… 

metmike: Heat ridge backing up late week 2 and we had a cooling trend on the models on Sunday, thru very early Monday, 6z run of the GFS but the last 12z EE added CDD's back and the 18z GFS ensemble added a massive 12 CDD's back.

This gave the ng just a bit of extra strength very early this Monday evening but only enough to get back close to the Sunday Evening highs, 3.111 this session and 3.115 was the high so far this week.........put in during the first minute of trading after the open last night.

This was still  $400/contract higher than the close on early Mon afternoon. Now we are seeing some weakness.

It's possible that some of the strength the last 24 hours is tied to spots gas prices spiking higher with the heat in the Northeast which is now exiting.

The East will actually have below average temps on a few days in the extended.

It's pretty tough to have extremely bullish weather/ng CDD's when the large population centers in the Northeast/East/Southeast have average to slightly below average temps for a week.

That area counts the most in generating residential cooling.....or heating in the Winter.

With the core/center of the heat ridge backing up to the Plains and even the Rockies..........where not many people reside, the extended forecast is not as bullish as it would be if you moved it at least 1,000 miles farther east. Maximizing it at 1,500 miles farther east.

This is the latest weather:

https://www.marketforum.com/forum/topic/70329/

July Natural Gas Prices Bounce on Day/Day Changes to Supply/Demand Balances

 Another change in the weather data, this time more supportive for gas demand, sparked a rebound in natural gas futures on Tuesday. Strong cash prices and a large dip in production aided in the rally, which resulted in the July Nymex futures contract jumping 5.8 cents to settle at $3.128. August climbed 5.1 cents to… 

metmike: The models did looks a bit warmer compared to Sunday Night. The 18z GFS ensemble model maps this evening are looking especially hot late in week 2 compared to previous solutions.

Natural Gas Futures Climb Early as Heat Seen Potentially Returning to Eastern U.S.

   June 9, 2021

7 day temps for tomorrows EIA report. Very bearish in the East/South. Very bullish in the West. Overall  more people had lower cooling demand that higher cooling demand. Do you have an estimate Larry?

Models are really showing major heat spreading east and becoming widespread later this month.

Mike,

 Memorial Day Week has always been a special week for me to analyze because it has often had either the highest or one of the highest injections of each season due to it being a holiday demand reducing week in combo with it typically having near the lowest total wx related demand of each season. I have found that the best correlation has been with CDDs (using Fri-Thu weeks) rather than CDDs + HDDs. So, I'll only look at CDDs:

CDD            EIA             Year
60             +92            2018
57             +77            2006
55             +62            2012
55             +80            2011
52             +65            2016
51             +99            2010
45             +119           2019
42             +102           2020
38             +110           2007
37             +119           2014
36             +102           2004
32             +132           2015
31             +111           2013
30             +106           2017
30             +124           2009
30             +105           2008
26             +105           2005
26               ?               2021 
25             +114           2003

Avg CDD 2003-2020 = 41
Avg EIA 2003-2020 = +101

- Note that 2021's CDDs are near the bottom (back to 2003) at only 26, which is 15 below the average for 2003-2020 of 41.

- Note that all weeks with 45 or fewer CDD had a +102+ EIA. Those with 32 or fewer CDD had a +105+ EIA.

- The highest EIA so far this season is +115 (2 weeks ago) and that was for a week with 7 fewer CDD and 5 fewer HDD. So, tomorrow's report may not be as high. However, that week had no holiday.

- Last week's EIA was +98 for a week with no holiday and 16 more CDD and 18 fewer HDD. Because each CDD seems to have more influence on NG demand than each HDD in late May, I'm considering Mem Day week to be more bearish in terms of wx related demand vs the prior week. Combining that with the holiday tells me to expect a good bit higher injection than last week's report's +98.

- Note that industry injection guesses for Memorial Day week have more often been too low than too high due to not reducing demand assumptions enough for the holiday. WSJ is going with +100 for its average. I think that will end up too low like usual.

- I'm going with +110 with a most likely range of +107 to +113.

Wonderful, wonderful, wonderful analysis Larry!

I agree completely with all of your thoughts.

I will add(and speculate) that such a bearish number expected,  could be causing limiting the bullish impact of the heat coming up in the 2nd half of June that could cause near record demand as it spreads from coast to coast and included the south for the first time later in the month.

Also, if the number is bearish tomorrow, we will get the usual knee jerk reaction lower.

If the forecast has continued to get hotter, that spike down will likely be bought.........and then the bearish news will be out and we can trade off of the weather forecast.

Also

1. This past week had some major heat in the northern half of the country(a few days in the key Northeast) but was cool in the south. CDD's will be more robust than the report tomorrow but just a bit above average? What do you for a week from tomorrow? 

2. We have major cooling coming this weekend into early next week in the Eastern half of the country,  so the EIA report 2 weeks from tomorrow will also be a bit above average CDD's and below average injection  but also not extreme because of that cooling.

3. The EIA report 3 weeks from tomorrow, the last day in June is when the CDD's could be near record levels and result in a small injection. We are trading that potential right now with the week 2 weather pattern.

4. It's pretty far out to speculate beyond that but a major upper level heat ridge across the entire country at the end of june is not going to be dislodged very easily. 

5. Seasonals typically top out in mid June and crash lower thru July. Late June and July are often the worst time to be long natural gas,. Even with modestly above average temperatures the price can go down. However, I have no doubt that if we have record warmth, we would very likely go higher. I'll put the seasonal graph of the next page.

I'm not sure what all goes into a chart like this, certainly some things that don't add up in the real world to the price going from the highest of the year in mid June to the lowest price of the year a month later.............that almost never happens in the real market in any year.

However, a chart like this is useful because it shows the strong seasonal/historical tendencies.

You don't want to be long in July unless the forecast has MAJOR heat or something else is extraordinarily bullish that would not be the case in previous July's.

Just like you wouldn't want to be short in March/April without a dang good reason and the weather reason to be short at that time of year is not compelling enough.............even though the weather in March and April can ADD to the bullish seasonals and give you MORE reason to be long.

https://seekingalpha.com/article/4160158-natural-gas-seasonal-play-sets-up-for-springtime-option-sellers

Thanks, Mike.

Let's make it fun like old times.  Do you have an EIA guess?

Does anyone else have an EIA guess?

How about +112 BCF

Due to the cooler than average temps for this time of year, I am expecting a higher injection. But with the higher heat moving in, there might be a conflagration in market action. Still going to lean bearish based on the report. Friday might be a rebound day.

Weekly Natural Gas Storage Report

 for week ending June 4, 2021   |  Released: June 10, 2021 at 10:30 a.m.   |  Next Release: June 17, 2021 

                                                                                                                                                                                                                                        +98 BCF  but the market did NOT act bullish at all from the release so our guesses were out to lunch.                                                               

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

Actual 98B    Forecast 98B    Previous 98B

Release DateTimeActualForecastPrevious
Jun 10, 2021 10:3098B98B98B
Jun 03, 2021 10:3098B95B115B
May 27, 2021 10:30115B104B71B
May 20, 2021 10:3071B60B71B
May 13, 2021 10:3071B76B60B
May 06, 2021 10:3060B64B15B

 Despite the significant market drop since the EIA release, I’m calling this +98 solidly bullish by my criteria (nothing to do with market reaction nor average industry guesses, which were near +100 making the +98 pretty neutral vs those guesses) considering the analysis that I posted last night. The 26 was by far the lowest number of CDD in a Memorial Day week resulting in a sub +100 EIA since at least 2003.

 My theory for the price drop is that the 0Z Euro ens and the 6Z GFS ens had fewer CDD than their respective prior runs. That in combo with NG having just hit a new multimonth high tells me that there were many wanting to sell NG but were waiting for the EIA to first be released so as to not chance what the EIA was going to be.

Thanks Larry, 

Sounds plausible..............a theory to explain why the market acted differently than why you think that it should based on your numbers.

I wasn't attached to my number and just threw it out there based on your numbers not having a clue about what the actual market was expecting.

After the release, I always go almost exclusively with the market reaction for the first hour after the number is released and not what I think the right reaction should be and look for reasons why the market is not acting that way and why I am still right.

The market stayed lower after the report and although models overnight were not as hot..........the market knew that a long time ago. It's possible there was a delayed reaction to something in the market for a long time but its even more possible that traders just did not see this newer/fresher information as bullish.

Natural Gas Prices Soften After EIA Storage Data Confirms Continued Loosening

So, NGI headline is:

 "Natural Gas Prices Soften After EIA Storage Data Confirms Continued Loosening"

 I firmly disagree with the idea that today's +98 confirmed a loosening. The holiday wasn't even mentioned in the entire article, which is poor journalism imo. If there had been no holiday, I would have called this about neutral vs last week. But with the holiday and considering the history that I analyzed, I strongly maintain that +98 was solidly bullish vs recent weeks as well as vs Memorial Day weeks for 2003-2020, overall.

 Actually, NG came all the way back into the 3.170s for a time before cooler models, especially 12Z GEFS, brought it back down to new session lows.

Edit: I just started a new NG thread here:

 NG 6/10/21+ - MarketForum

Thanks Larry!