For the latest weather that effects the Natural Gas market go here:
Market Awaiting EIA Storage Report as August Natural Gas Called Lower
8:48 AM
August natural gas futures were set to open Thursday about 1.6 cents lower at around $2.813/MMBtu, with the market looking ahead to a potentially leaner than average Energy Information Administration (EIA) storage report that could help gauge the impact of recent heat.
EIA Storage Build Lighter Than Surveys, But Natural Gas Futures Market Not Impressed
for week ending July 6, 2018 | Released: July 12, 2018 at 10:30 a.m. | Next Release: July 19, 2018
Working gas in underground storage, Lower 48 states Summary text CSV JSN | |||||||||||||||||||||||||
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Historical Comparisons | |||||||||||||||||||||||||
Stocks billion cubic feet (Bcf) | Year ago (07/06/17) | 5-year average (2013-17) | |||||||||||||||||||||||
Region | 07/06/18 | 06/29/18 | net change | implied flow | Bcf | % change | Bcf | % change | |||||||||||||||||
East | 480 | 460 | 20 | 20 | 585 | -17.9 | 593 | -19.1 | |||||||||||||||||
Midwest | 477 | 455 | 22 | 22 | 716 | -33.4 | 642 | -25.7 | |||||||||||||||||
Mountain | 143 | 139 | 4 | 4 | 192 | -25.5 | 168 | -14.9 | |||||||||||||||||
Pacific | 260 | 257 | 3 | 3 | 291 | -10.7 | 305 | -14.8 | |||||||||||||||||
South Central | 843 | 841 | 2 | 2 | 1,144 | -26.3 | 1,014 | -16.9 | |||||||||||||||||
Salt | 238 | 245 | -7 | -7 | 328 | -27.4 | 291 | -18.2 | |||||||||||||||||
Nonsalt | 605 | 596 | 9 | 9 | 816 | -25.9 | 723 | -16.3 | |||||||||||||||||
Total | 2,203 | 2,152 | 51 | 51 | 2,928 | -24.8 | 2,722 | -19.1 | |||||||||||||||||
These temperatures below cover the period for this last EIA report It was a hot week!
Below, they are broken down into Highs/Lows for the same 7 day period:
By metmike - July 10, 2018, 2:30 p.m.
Natural gas is testing the uptrend line from the Dec 2017 lows, just above 2.6, connecting to the higher lows in Feb. just below 2.7, then the higher lows in May at 2.727.
Natural gas 3 months |
Naturalgas 1 year below
Naturalgas 5 years below
Naturalgas10years below |
https://www.eia.gov/outlooks/steo/
By WxFollower - July 10, 2018, 8:06 p.m.
Production Surge Keeping Natural Gas Futures Bears in Control; Spot Prices Pull Back
5:19 PM
From the very long article found at the above link, this little bit is the key to today's price drop:
"Looking at the weather, overnight changes heading into Tuesday’s session showed cooler trends late next week and next weekend, and those trends continued in the midday data, dropping a few additional cooling degree days (CDD), according to NatGasWeather."
I concur with this as I, myself, noted cooling models/forecasts. The forecast I saw had notable CDD losses in the 6-10 day period, which is consistent with the bolded. Days 11+ were near flat. So, I'm confident that a cooler 6-10 day period was the main wx influence today as that was dialed in leading to new selling.
Should temperatures go up in the 2 week forecast, I think that natural gas will get some good support. For the following reasons:
1. Storage is 700 bcf behind last year and 500 bcf behind the 5 year average.
2. The price is testing an uptrend line going back to the lows in December 2017.
3. Seasonal weakness from mid-June to mid-July is wearing off.
However, should the much cooler temps invading the Midwest next week encompass a larger area for a longer time, the long lived 7 month uptrend could(should) be broken. It's barely holding at the moment and it won't take much additional cooling to break thru.
After the bullish EIA number was out, the market did some buy the rumor, sell the fact type action as next weeks number is not going to be so bullish and we are trading the future now.
The 12z GFS came out with much warmer maps for the 10-12 day period, mainly from slowing down the same cold front on previous runs and allowing heat to surge in for several days ahead of it. This allowed ng to pop back up near its highs from just after the EIA number came out, th3n we finished weak..........as the overall pattern, especially noted in the 6-10/8-14 day has significant cooling in the Midwest.....despite the 12z GFS outlier solution of the 3 day heat surge during that period.
From Natural Gas Intelligence after the close:
Lean EIA Build Can’t Spark Natural Gas Futures Rally; SoCal Spot Strengthens
Natural gas futures pulled back Thursday as weekly government storage data came in tighter than surveys but not enough to