Archive for the ‘Energy’ Category

Market Commentary

September 20th, 2018

The U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 86 billion cubic feet for the week ended Sept. 14.

Analysts polled by S&P Global Platts had forecast a climb of 83 billion cubic feet, while the average over the last five years for the same week was a rise of 76 billion.

Total stocks now stand at 2.722 trillion cubic feet, down 672 billion cubic feet from a year ago, and 586 billion below the five-year average, the government said.

October natural gas NGV18, +0.24% traded at $2.913 per million British thermal units, up half a cent from Wednesday’s settlement.

It was trading at $2.90 before the supply data.

Working Gas in Underground Storage, Lower 48   Year Ago (09/14/17)   5-Year (2013-17) Average  
  Sep-14-2018 Sep-07-2018 net change (Bcf) implied flow (Bcf)   stocks (Bcf) % change stocks (Bcf) % change
East 709 679 30 30   830 -14.6 801 -11.5
Midwest 770 734 36 36   933 -17.5 910 -15.4
Mountain 170 166 4 4   211 -19.4 199 -14.6
Pacific 255 250 5 5   299 -14.7 328 -22.3
South Central 818 806 12 12   1120 -27.0 1071 -23.6
  Salt 184 182 2 2   301 -38.9 274 -32.8
  Nonsalt 635 624 11 11   819 -22.5 797 -20.3
Total 2722 2636 86 86   3394 -19.8 3308 -17.7
             


Storage Report Summary:
Working gas in storage was 2,722 Bcf as of Friday, September 14, 2018, according to EIA estimates.

This represents a net increase of 86 Bcf from the previous week. Stocks were 672 Bcf less than last year at this time and 586 Bcf below the five-year average of 3,308 Bcf.

At 2,722 Bcf, total working gas is below the five-year historical range.

Fundamental Daily Forecast – Market Clawing Back Last Week’s Discount

September 18th, 2018


Natural gas futures are edging higher early Tuesday as investors continue to react to the recovery in the Carolinas in the aftermath of Hurricane Florence and forecasts for warmer temperatures which should lead to increased demand. The limited price action suggests short-covering is taking place as buyers attempt to absorb the huge discount that was posted ahead of the storm last Thursday and Friday.

November Natural Gas futures are trading $2.858, up $0.044.

Bespoke Weather Services put it this way, “Hurricane Florence demand destruction was not quite as bad as anticipated, and combined with significant short-term heat it was enough to keep physical prices firm.”

Bespoke went on to say, “Yet today’s move seemed to be canceling out the overreaction” to Florence’s potential impacts in Friday’s trading, “and we now struggle to see what the upward catalyst would be to move prices above resistance around $2.85 given production back at record highs.”

U.S. Natural-Gas Report

September 13th, 2018

EIA report shows a weekly rise of 69 billion cubic feet in U.S. natural-gas supplies

The U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 69 billion cubic feet for the week ended Sept. 7.

Analysts polled by S&P Global Platts had forecast a climb of 70 billion cubic feet, while the average over the last five years for the same week was a rise of 74 billion.

Total stocks now stand at 2.636 trillion cubic feet, down 662 billion cubic feet from a year ago, and 596 billion below the five-year average, the government said.

October natural gas NGV18, +0.57% rose 1.4 cents, or 0.5%, at $2.841 per million British thermal units, little changed from before the supply data.

Natural Gas Price Prediction – Prices Rise as Storms Brew

September 12th, 2018


Natural gas prices increased for a second consecutive trading session rising nearly 1% after rebounding from trend line support. 

While Hurricane Florence is getting all the headwinds, there is a cyclone forming in the gulf that could put infrastructure at risk. 

Hurricane Isaac is also moving toward the Caribbean which could lead to another hurricane making its way into the Gulf of Mexico.

Currently the October Natural Gas contract is trading higher by 3.4 at $2.86.

Hurricane Activity

Most of the US infrastructure is located in the Gulf of Mexico. The National Oceanic Atmospheric Administration reports that there is a disturbance

which has a 50% chance of forming a cyclone which could threaten Gulf of Mexico infrastructure. Hurricane Florence is unlikely to generate volatility

in the natural gas space, but it is causing some price spikes in gasoline prices.

Market Report

September 6th, 2018

The U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 63 billion cubic feet for the week ended August 31.

Analysts polled by S&P Global Platts had forecast a climb of 60-70 billion cubic feet, while the average over the last five years for the same week was a rise of 65 billion.

Total stocks now stand at 2.568 trillion cubic feet, down 643 billion cubic feet from a year ago, and 590 billion below the five-year average, the government said.

October natural gas NGV18, -0.93% fell 2 cents, or 0.7%, at $2.775 per million British thermal units. It was trading at $2.784 before the supply data.

Natural Gas Price Fundamental Daily Forecast – Hurricane Worries Should Pass Quickly

September 4th, 2018


Natural gas prices are trading sharply lower amid uncertainty over the impact of a hurricane that is growing in terms of size and wind speed over the Gulf of Mexico.

After brushing past the west coast of Florida as a tropical storm late Monday afternoon, the tropical storm quickly developed into Hurricane Gordon

and appears to be headed toward Gulf coast natural gas and crude oil operations near the coast of Louisiana.

At 1300 GMT, October Natural Gas futures are trading $2.85, lower by 6.3 cents.

According to reports, Hurricane Gordon threatens to spread flooding rains into the Mississippi Delta and Midwest later this week.

“Strengthening is expected today, and Gordon is forecast to be a hurricane when it makes landfall along the north-central Gulf Coast,” according to the National Hurricane Center advisory. “Rapid weakening is expected after Gordon moves inland.”

Gordon is expected to pass through the eastern edge of the Gulf’s offshore oil and natural gas platforms where it will probably have little impact because it isn’t that strong and will pass through the area quickly, according to the Commodity Weather Group.

Additionally, crews were pulled off two platforms by the Anadarko Petroleum Corp., according to their website.

Forecast

We’re expected a volatile two-sided trade early this week as investors react to the hurricane news. Since the hurricane is a fast-moving event, natural gas traders should return to normal fundamentals fairly quickly.

The price action the rest of the week should continue to be driven by concerns over a potential storage deficit at the start of the winter heating season in November.

Natural Gas Price Forecast

July 31st, 2018

Natural gas markets have gapped lower to kick off the week, and then broke down to the $2.77 level,

an area that had been support of last week.

Currently, the September contract is trading higher by 3 cents at $2.82.

The market is trying to figure out where to go next,

and therefore anticipate a lot of volatility. Overall, we are closer to the bottom of the overall range,

so it sno surprise to see a bit of a pop over the next several sessions. That doesn’t mean is going to be easy,

and there is a lot of noise just above current pricing. The $2.70 level is a major support level that extends down to the $2.60 level.

 

Natural Gas Price Fundamental Daily Forecast – Friendly EIA Report, Favorable Weather Pattern Could Drive Prices into $2.831 Over Near-term

July 30th, 2018

Natural gas futures are trading higher early Monday. The rally is being fueled by follow-through buying related to Thursday’s bullish U.S. Energy Information Administration’s weekly storage report

and a friendly short-term weather outlook for several key demand areas.  At 0732 GMT, September Natural Gas futures are trading $2.801, up $0.019 or +0.68%.

Forecast

While last week’s EIA report may be underpinning natural gas prices, it’s the short-term weather forecast that is providing some of the upside momentum.

According to NatGasWeather.com for the period July 30 to August 5, “Weather systems with showers and thunderstorms will track across the Midwest and east-central U.S. this week with comfortable highs of 70s to lower 80s, including into portions of the southern U.S. for lighter demand. Hot upper high pressure continues to dominate the western and southern U.S. with highs of 90s to 110F, hottest from California to Texas for strong regional demand. Late next weekend, hot high pressure will expand across the eastern half of the country with 90s gaining ground for increasing national demand. Overall, demand will be high to moderate.”

Looking ahead to Thursday’s EIA report, the early estimate shows a 40 Bcf to 45 Bcf build for the week-ending July 27. Last year, the EIA recorded an 18 Bcf injection, and the five-year average is a build of 43 Bcf.

Technically, the main trend is up according to the daily chart. The price action suggests there may be enough upside momentum in the market to trigger a rally into a technical retracement zone at $2.831 to $2.869. We expect short-sellers to come in on a test of this zone.

 

Natural Gas Storage Report

July 19th, 2018

The natural gas storage deficit grew yet again as this week’s injection of 46 Bcf came up noticeably short of the 56 Bcf market expectation. This build may be more robust than last year’s value of 31 Bcf, but it pales in comparison to the five-year average of 62 Bcf, which more accurately reflects the state of the thin storage levels that the market is currently experiencing. On a regional level, record demand has been recently reported in ERCOT for July, resulting in a 5 Bcf withdrawal from storage in South Central this week due to increases in cooling demand and power burns. Despite the recent heat waves in the South Central and West regions, the potential development of a weak El Niño could provide cooler weather patterns for the East later in July and into early August, so a small opportunity to close the storage deficit could present itself. Unsurprisingly, dry gas production continues to hover near 80 Bcf/d, but, according to a recent report from Constellation, it would still take an additional 5 Bcf/d to return to average storage levels by the end of injection season.

Working natural gas in storage currently stands at 2,249 Bcf, which is 710 Bcf (24.0%) lower than this time last year and 535 Bcf (19.2%) lower than the five year average.

The August 2018 NYMEX Futures price began the day around $2.71/MMBtu prior to the report’s release, but has since jumped to $2.77/MMBtu after the report was posted.
 

Natural Gas Futures Stay Lower After Weekly Storage Report

July 12th, 2018

 

Natural gas futures stayed lower on Thursday, despite data showing that supplies in storage rose less than forecast last week.

Front-month U.S. natural gas futures inched down 2.8 cents, to $2.802 per million British thermal units (btu) by 10:45AM ET.

Futures were at around $2.824 prior to the release of the supply data.  The U.S. Energy Information Administration said in its weekly report

that natural gas storage in the U.S. rose by 51 billion cubic feet (bcf) in the week ended July 6, below forecasts for a gain of 55 bcf.

That compared with a build of 78 bcf in the preceding week, an increase of 57 bcf a year earlier and a five-year average rise of 77 bcf.

Total natural gas in storage currently stands at 2.203 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.

That figure is 725 bcf, or around 24.7%, lower than levels at this time a year ago, and 519 bcf, or

roughly 19.0%, below the five-year average for this time of year.