Thanks Larry!

Old thread here:          

    Natural Gas April 21, 2022            

                            86 responses |               

                Started by metmike - April 21, 2022, 11:48 a.m.     

https://www.marketforum.com/forum/topic/83540/

++++++++++++++++++++++++++++++

Temperatures from last week for the next EIA report this Thursday, including Memorial Day.

Very warm in the East and South that have some high population centers.

Cool Northwest to  Rockies to N.Plains, where not many people live.

Injection might be a bit less than average.

OK, I just looked at your EIA injection data for the first time and it confirms that with the CDD's in the top half of the years which you have listed. 

Wow, Larry. You sure have tons of great data!

Dome of death, La Nina heat ridge developing in week 2!

https://www.marketforum.com/forum/topic/83844/#83852

https://www.marketforum.com/forum/topic/83844/#83854

8 to 14 Day Outlooks Click below for information about how to read 6-10 day outlook maps  Temperature        Precipitation Click below for archives of past outlooks (data & graphics), historical analogs to todays forecast, and other formats of the 8-14 day outlooks ArchivesAnalogsLines-Only FormatGIS Data Temperature Probability Precipitation Probability

Here's some good data from the last year, so that you can see how the injections/withdrawals compared to the forecast. 

1. Note that the blue line in the graph below is well below the 5 year average and near the bottom of the 5 year range.  This is one of the biggest reasons that prices are the highest in over a decade.

2. Record exports and high prices in Europe are another factor.

3. Seasonals (based on historical prices) are often peaking in June is another factor.

4. Long term investment by the big players in natural gas, have been lagging too because of the war on fossil fuels, so production has been slow to respond to such high prices compared to other times in the past. 

https://ir.eia.gov/ngs/ngs.html

Weekly Natural Gas Storage Report

 for week ending May 27, 2022   |  Released: June 2, 2022 at 10:30 a.m.   |  Next Release: June 9, 2022 

                                               +90 BCF Bearish                                                         

Summary

Working gas in storage was 1,902 Bcf as of Friday, May 27, 2022, according to EIA estimates. This represents  a net increase of 90 Bcf from the previous week. Stocks were 397 Bcf less than last year at this time and 337 Bcf below the five-year average of 2,239 Bcf. At 1,902 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. 

Forecast Heat, ‘Stumbling’ Production Lift Natural Gas Futures Early

Declining production estimates and indications of stronger heat toward the middle of the month in the latest forecasts helped send natural gas futures sharply higher in early trading Monday. The July Nymex contract was up 46.0 cents to $8.983/MMBtu at around 8:45 a.m. ET. The July contract was testing the psychologically significant $9 mark in… 

metmike: The upside breakaway gap on last night's open obviously held and we're up $7,000 vs the close Friday from the heat ridge.

https://www.marketforum.com/forum/topic/83540/#85252

https://www.marketforum.com/forum/topic/83844/#85338

NG just dropped $7,000/contract in 1 hour!!!

-$9,000 now from the highs!

Around a 10,000 drop from the high today to the low a few minutes ago.

Barely filled the huge bullish break away gap higher on Sunday Night's open.

Now back up 4,000+ from the extreme spike lows just 5 minutes ago. This is the most extreme trading in ng in history and I've been trading it for 3 decades.

Back down to -12,000 from the highs(to the lows). Yep, have NEVER witnessed this extreme of a price move so quickly in ng trading history before today. NEVER!

Larry,

Are you sure you don't want to start trading natural gas again (-:

Mike, yes, I'm sure. What do the GEFS CDDs look like today at 12Z vs the 6Z/0Z? 

 NG dropped from ~9.54 just after noon CDT to ~8.46 near 12:50 PM CDT.

 Here's the cited main reason for the plunge, a SMALL explosion at Freeport LNG export facility:

 https://twitter.com/DeItaone/status/1534594548541927425?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

 Any guesses for tomorrow's EIA? Will it be the highest injection so far this season?

Thanks much Larry. I'll guess in a minute.

Freeport LNG Blast Rocks Natural Gas Futures, but Cash Still Climbing on Scorching Heat

 Although the long-term implications were still unknown, news of an explosion at the Freeport liquefied natural gas (LNG) terminal on the Texas coast took a hatchet to natural gas futures midweek. The July Nymex gas futures contract – up about 30 cents at midday and not far off the $9.664/MMBtu intraday high – plummeted as… 

metmike: The huge heat ridge was supporting ng, with it being sharply higher..... until the explosion damaged one of our export facilities and ng had the wildest trading day in history. Closing the huge bullish gap higher on Sunday Night and at one point traded  over $12,000/contract off the highs of the day and most of the drop came in just over an hour.

Sharply lower still  this evening.

Larry, I'll guess 99 BCF

NG down another 5,000+  since the close and down 15,000+ from the highs late  this morning.

I would bet that this is the biggest drop in less than 8 hours in history.

  ‹ See All Natural Gas Reports

Weekly Natural Gas Storage Report

 for week ending June 3, 2022   |  Released: June 9, 2022 at 10:30 a.m.   |  Next Release: June 16, 2022 

                                                                                                                                                                                +97 BCF A bit bullish??..........I guessed +99 BCF                                                                                                                                                                                                                                                   

Summary

Working gas in storage was 1,999 Bcf as of Friday, June 3, 2022, according to EIA estimates. This represents  a net increase of 97 Bcf from the previous week. Stocks were 398 Bcf less than last year at this time and 340 Bcf below the five-year average of 2,339 Bcf. At 1,999 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 2017 through 2021. The dashed vertical lines indicate current and year-ago weekly periods.

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

Latest Release  Jun 09, 2022  Actual97B   Forecast96B    Previous90B

Natural Gas Futures Recover Ground after EIA Storage Data Falls Short of Triple-Digit Mark

metmike: Intense heat which will increase AC use and ng demand still on the way but after yesterday/last nights plunge of more than $16,000/contract in less than 24 hours..........one would think that the bulls may be more cautious......but this is ng. Maybe we'll be up $20,000/contract next week?  Seriously!

Mike, excellent guess of the EIA. With it being +97, it is the largest injection of the season to date. It remains to be seen whether or not it ends up the largest of the entire year. Going back 20 years, Memorial Day week's average injection is higher by a good margin than any other week of the year though that doesn't mean any one year's Memorial Day week's injection will necessarily be the largest of that year. The hottest ones are less likely to be.

 It looks like average survey guesses properly took into account the Memorial Day holiday related demand reduction because they were near this level (upper 90s to low 100s). For example, the WSJ poll mean was perfect with its +97.

Thanks very much Larry!

I remember the good old days when you brought a contest like this to us weekly and had several people making guesses.

As you noted a several weeks ago, trading ng with skill/profits based mostly on weather has become more like driving thru a field loaded with land minds!

The historical drop of $16,000/contract in less than 24 hours, 2 days ago with NO CHANGE in the HOT weather forecast is a perfect example.

Highest price for natural gas in 14 years. Every time prices increased, even half this much the rig count soared higher so that supplies would gush out as the big investers saw incentive to make more money.

The cure for high prices is...............high prices.

Not any more with fossil fuels. The government is suppressing new supplies by disadvantaging new money investments in fossil fuels  to stifle future profits with its war on fossil fuels.

https://ycharts.com/indicators/us_gas_rotary_rigs

Investment moneys in this business have seen the writing on the wall, long before Biden took over(Obama made it crystal clear). There are other factors at play with regards to production/well too. 

                       https://www.eia.gov/dnav/ng/hist/e_ertrrg_xr0_nus_cm.htm 

https://www.politico.com/story/2012/04/uttered-in-2008-still-haunting-obama-in-2012-074892

“If somebody wants to build a coal-fired power plant, they can. It’s just that it will bankrupt them,” Obama said, responding to a question about his cap-and-trade plan. He later added, “Under my plan … electricity rates would necessarily skyrocket.”

Forecast is close to expected. Troughing in the East/Northeast means cooler temps there where alot of people live........a bit bearish ng.

Heat ridge shifts west to the Plains, where less people live.

Natural Gas Futures Drop Again as Market Fixates on Freeport LNG Uncertainty

Natural gas futures hovered in a narrow range of modest gains and losses early Monday before cruising downward and ultimately finishing deep in negative territory, as traders assessed robust summer demand expectations against a shock last week to U.S. export capacity. The July Nymex gas futures contract settled at $8.609/MMBtu, down 24.1 cents day/day. The… 

metmike: The heat has become a bit more bullish the model run, with less cooling in week 2 in the Northeast. This is battling some strong bearish headwinds.

Temps for this Thursday's EIA:

Hot in the SW/W to Texas.

Pleasant, N.Plains to Midwest to Northeast to Mid Atlantic to Upper South..where alot of people live.  Injection should be close to average, maybe a few BCF more than average.

Do you have anything Larry? Others?

NG just fell off another cliff!

Up sharply after midnight when, especially the Euro was much hotter......+6 CDD's but just spiked down $9,000 from those highs real fast.

Down $16,000/contract from the highs!

17,000.....18,000

Mike,

 So glad to not be trading this these days. If you are, hopefully you're doing well or at least ok.

Thanks Larry!

I was going to buy 5 contracts after midnight, especially after  the Euro came out hotter and of course use a trailing stop and staying up all night and could have done well as we rallied to the highs after 6:30am.

 Just couldn't pull the trigger and chose sleep instead of stress. A drop of 19,000, most of it in less than 2 hours. I think that breaks last weeks record drop.

In the past, there were some YEARS that didn't feature a range that wide!

Just confirmed, we blew away last weeks 12,000 drop easily!

https://www.marketforum.com/forum/topic/85343/#85434

$15,000 of it came in around 20 minutes!! Any idea what the news was?

Mike said: "$15,000 of it came in around 20 minutes!! Any idea what the news was?"

-------------------------------------------------------------------------

Mike,

06/14 08:43a CST  *DJ Natural Gas Falls 13% to $7.460 After Freeport LNG Says 
Full Restart Not Likely Until Late 2022 
 
  
  (MORE TO FOLLOW) Dow Jones Newswires 

06/14 09:00a CST  DJ Natural Gas Falls 16% On Freeport Restart Delays -- Market 
Talk 
 
     0959 ET - Natural gas prices drop 16% to $7.211/mmBtu after Freeport LNG, 
the nation's second-largest LNG exporter, says in an email it's not likely to 
see operations fully back to normal until late 2022 following last week's fire 
and explosion that shut down the plant completely. It says, however, that the 
plant could see a resumption of "partial operations" in about 90 days. The 
company previously said it would be shut down for at least three months, and so 
this news of even a partial restart still being three months away is bearish in 
that overall feedgas to LNG facilities demand could remain subdued for a while. 
(dan.molinski@wsj.com)  
 
  (END) Dow Jones Newswires 

Thanks much Larry!  I was guessing it might be related to the same thing that hit a week ago based on how similar the reaction was. Last week, the market took a bit longer to react but I think that traders were super tuned into any news on this particular item, after that event last week and reacted with mind boggling swiftness.

Natural Gas Futures Rebound Early as Traders Weigh Freeport Outage, Potentially Hot Summer

 Natural gas futures rebounded early Wednesday as traders continued to mull the impact of an extended outage at the Freeport liquefied natural gas (LNG) export terminal in the context of storage deficits and a potentially hot summer ahead. After plummeting $1.420 in Tuesday’s session following news that the Freeport LNG facility won’t see a return… 

metmike: One can guess that we have this dialed in but trading this market without a stop would be insane. If somebody was long 5 contracts of July NG yesterday with no stop,  they could have lost $75,000 in 20 minutes yesterday when the news hit.......or made that much being short. 

Based on me testing some orders, it looks like the margins haven't changed.

U.S. Natural Gas Storage 

Latest Release   Jun 16, 2022   Actual92B   Previous97B

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

Weekly Natural Gas Storage Report

https://ir.eia.gov/ngs/ngs.html

 for week ending June 10, 2022   |  Released: June 16, 2022 at 10:30 a.m.   |  Next Release: June 23, 2022 

                                 +92 BCF Nuetral?                                                                                                                                                                                                     

Summary

Working gas in storage was 2,095 Bcf as of Friday, June 10, 2022, according to EIA estimates. This represents  a net increase of 92 Bcf from the previous week. Stocks were 330 Bcf less than last year at this time and 323 Bcf below the five-year average of 2,418 Bcf. At 2,095 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 2017 through 2021. The dashed vertical lines indicate current and year-ago weekly periods.

Storage Injection Meets Expectations; Rebound Rally for Natural Gas Futures Continues

metmike: We spiked to $8 after the release and are off 4,000 from the highs but still up almost 2,000 for the day with extreme heat dominating the 2 week forecast.

1pm update: We're 6,000 off the highs and around unchanged for the day.

NG had a fairly decent sized gap lower on the open. -2,000 compared to the last trade Friday.

We continued down another 1,000 after that, so the gap is wide open.

Could serve as a bearish downside break away gap.

A trade above 6.881 would fill the gap and negate that technical formation above and potentially be a gap and crap, selling exhaustion signature. 

Weather model updates will play a role in determining which one of those technical formations is likely to stay in place.

Seasonals strongly favor an early Summer top at this time of year. The massive spike higher in recent weeks would certainly suggest the top is in. 

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

      +++++++++++++++++++++++++++                

https://www.marketwatch.com/investing/future/ngn22/charts?mod=mw_quote_advanced

I had said 11 days ago:

 "Mike, excellent guess of the EIA. With it being +97, it is the largest injection of the season to date. It remains to be seen whether or not it ends up the largest of the entire year. Going back 20 years, Memorial Day week's average injection is higher by a good margin than any other week of the year though that doesn't mean any one year's Memorial Day week's injection will necessarily be the largest of that year."

-------------------------------------------------------------------

 Update: I just realized that this changed due to revisions released in last week's report:

 "the implied net change between the weeks ending May 27 and June 03 changed from 97 Bcf to 102 Bcf."

 This obviously somewhat increases the chance that Memorial Day week in 2022 will be the largest of the year.

 Also, note that the subsequent week had a +92 or a 10 lower injection. This was despite having 4 fewer CDDs and 2 fewer HDDs than Memorial Day week. This likely was largely due to not having the holiday slowdown of Memorial Day week. It is the holiday slowdown of Memorial Day week within a very low demand time of year that is the major reason why that week averages the highest injection of the season.

 Now I'll update my table to add 2022:

Memorial Day week EIA vs CDDs 2003-2021:

CDD            EIA             Year
60             +92            2018
57             +77            2006
55             +62            2012
55             +80            2011
52             +65            2016
51             +99            2010
45             +119          2019

44              +102         2022

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              +98            2021  
25             +114           2003

Avg CDD 2003-2022 = 40
Avg EIA 2003-2022 = +101

Thanks much Larry!

we missed your ng posts like this from the past and are thrilled to see them.

so I went from being 2 bcf too high to 3 bcf too low.

Tuesday after the close:

Easing Heat, ‘Monumental Reshaping’ of Supply Fuels More Losses for Natural Gas Futures

 Wednesday morning:

Natural Gas Futures Slide Early Amid Freeport LNG Impacts as Forecasts Trend Hotter

metmike: It is looking hotter in the extended by if the forecast was all about weather, we would never have been sharply lower earlier.

https://www.marketforum.com/forum/topic/83844/

metmike: It is looking hotter in the extended by if the forecast was all about weather, we would never have been sharply lower earlier.

------------------------------------

Mike,

 As you know, this is one of the major reasons I've lost interest in trading it.

Thanks Larry!

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

U.S. Natural Gas Storage

  Latest Release    Jun 23, 2022    Actual74B    Forecast65B   Previous92  BBEARISH!!!

 https://ir.eia.gov/ngs/ngs.html

Weekly Natural Gas Storage Report

 for week ending June 17, 2022   |  Released: June 23, 2022 at 10:30 a.m.   |  Next Release: June 30, 2022 

                                                   BEARISH!!!!!!                                                                                                                                                                                                                                                                                                                                                                                           

Summary

Working gas in storage was 2,169 Bcf as of Friday, June 17, 2022, according to EIA estimates. This represents  a net increase of 74 Bcf from the previous week. Stocks were 305 Bcf less than last year at this time and 331 Bcf below the five-year average of 2,500 Bcf. At 2,169 Bcf, total working gas is  within the five-year historical range.

This was the 7 day period for that EIA........HOT!

High demand  for AC and burning of NG to generate electricity!!

After Record Heat, Cooler Forecast Leads to Sharp Discounts for Natural Gas Weekly, Futures Prices

https://www.naturalgasintel.com/after-record-heat-cooler-forecast-leads-to-sharp-discounts-for-natural-gas-weekly-futures-prices/

metmike: Seasonals crash lower here but storage is near the bottom of the 5 year average and there's too much heat in the July forecast to do much catching up. However, the rig count is finally responding to the higher prices.

Higher Production, Weaker LNG Export Volumes Seen Pressuring Natural Gas Futures

metmike: Mixed signals here. Bearish items are noted above. Also, July NG expires tomorrow which often features a spike......more often higher than lower. Weather is still bullish/hot in many places but NOT AS hot as previous and Summer forecasts and the heat backs off in the high population Northeast.

Technicals Drive Natural Gas Futures Rebound as Cash Rises on Lingering Heat

July Temps ‘Rather Bullish’ as Natural Gas Futures Extend Gains

metmike: Nothing new in the forecast. July NG expires today.

Temps last week for this week's EIA report:

Hot in the Plains!! Mild/Pleasant Northeast to Mid Atlantic. Also Rockies

Overnight Forecasts Maintain Strong July Heat as Natural Gas Futures Climb Early

Freeport LNG Outage Proves Need to Boost Natural Gas Output, Says Huntsman CEO

https://live-natgasintel.pantheonsite.io/freeport-lng-outage-proves-need-to-boost-natural-gas-output-says-huntsman-ceo/

August Natural Gas Futures Make Soft Landing at Front of Curve Despite Bullish Backdrop

 Nymex natural gas futures, led now by the August contract, failed to hold onto early price gains amid weakening demand ahead of the holiday weekend. The August Nymex futures contract settled at $6.498/MMBtu, down 7.2 cents on the day. September futures slipped 6.4 cents to $6.493. At A Glance: Models still point to hot July… 

metmike: Lower CDD's on all the models this morning/early pm.

https://www.marketforum.com/forum/topic/85343/#86436

https://wattsupwiththat.com/2022/06/28/the-best-mislaid-plans-of-mice-and-men-often-go-awry-biden-oil-edition/

Most of the Freeport LNG shipments this year were going to Europe:

The sudden ~2 Bcf/d glut in domestic supply caused US natural gas prices to retreat and European LNG prices to skyrocket again.  

The Freeport facility accounts for roughly 20% of U.S. LNG processing capacity, drawing 2 billion cubic feet per day (bcfd) of natural gas from U.S. shale producers.

A full restart of the facility will not happen until late this year, the company said this week. The outage sent U.S. gas futures down 18% from the price a day before the fire, while European gas prices have surged more than 60%, with an additional boost from less gas on Russian pipelines. r

  https://ir.eia.gov/ngs/ngs.html

Weekly Natural Gas Storage Report

 for week ending June 24, 2022   |  Released: June 30, 2022 at 10:30 a.m.   |  Next Release: July 7, 2022 

                                                                                                                                                                                                         +82 BCF Bearish!                                                                                                                                                                                                                                      

Summary

Working gas in storage was 2,251 Bcf as of Friday, June 24, 2022, according to EIA estimates. This represents  a net increase of 82 Bcf from the previous week. Stocks were 296 Bcf less than last year at this time and 322 Bcf below the five-year average of 2,573 Bcf. At 2,251 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. 

U.S. Natural Gas Storage

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

In Historic Bloodbath, Natural Gas Futures Drop $1-Plus on Storage, Freeport News

Mike, Do you happen to know:

1. How the CDDs were this morning (0Z/6Z) vs yesterday afternoon/evening? 

2. How today's 12Z CDDs were vs today's 0Z/6Z?

 In other words, can any of today's huge price drop be attributed to modeled DD losses?

 TIA

Larry,

The 12z GFS was -11 CDD's vs the previous run and ensemble was -9 CDD's vs the previous run but much of the drop already happened by the time that was out.

Mike, thanks.

 Do you know how the CDDs were this morning (0Z/6Z) vs yesterday's 12Z? 

The 0z was the same but the 6z was +4 CDD's...then the cooler 12z run for the GFS.

The EE was actually the same for the 12z vs the 0z. Why do you ask?

Hey Mike,

 I ask because I'm curious if any portion of one of the biggest % morning price drops on record can possibly be attributed to cooler models/forecasts. All I read was that it due to the bearish EIA as well as more bearish news regarding LNG exports. I saw nothing about cooler wx.

All the models were much hotter overnight. 

EE +6 CDD's , GFS En +5 CDDs.

Volatility Amid Freeport LNG Outage Concerns Sees Natural Gas Futures Pare Losses

New NG thread starting with closing news for 7/1/22:

https://www.marketforum.com/forum/topic/86665/