Entelrgy

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. decreased by 91 billion cubic feet in the week ended Jan. 4, compared to forecasts for a draw of 76 billion.
Although prices extended gains after in a knee-jerk reaction to the larger-than-expected decline, it quickly returned to levels seen prior to the release.
At 10:37 AM ET (15:37 GMT), natural gas for delivery in February on the New York Mercantile Exchange rose 4.5 cents, or about 1.5%, to trade at $3.029 per million British thermal units.
Total U.S. natural gas storage stood at 2.614 trillion cubic feet, 7.2% lower than levels at this time a year ago and also 15.1% below the five-year average for this time of year.nergy Information Administration said in its weekly report that natural gas storage in the U.S. decreased by 91 billion cubic feet in the week ended Jan. 4, compared to forecasts for a draw of 76 billion.
Although prices extended gains after in a knee-jerk reaction to the larger-than-expected decline, it quickly returned to levels seen prior to the release.
At 10:37 AM ET (15:37 GMT), natural gas for delivery in February on the New York Mercantile Exchange rose 4.5 cents, or about 1.5%, to trade at $3.029 per million British thermal units.
Total U.S. natural gas storage stood at 2.614 trillion cubic feet, 7.2% lower than levels at this time a year ago and also 15.1% below the five-year average for this time of year.

Natural Gas January 9, 2019

Natural gas futures are trading flat-to-lower in limited trading early Wednesday. Traders continue to adjust positions while waiting for the short-term or mid-term weather forecasts to confirm or

deny the return of cooler temperatures later in the month. Despite the lack of conviction in the futures markets at this time, the spot market posted double-digit gains across the eastern two-thirds of the Lower 48,

according to the Natural Gas Intelligence report.

The February Natural Gas contract is trading at $2.95, down $0.01.

Weather Opinions

Bespoke Weather Services blamed the up-and-down price action to shifting warmer and cooler trends in the various weather model runs.

“A disturbance moving across the Great Lakes is forecast to intensify significantly as it traverses New England” Tuesday night into Wednesday, the National Weather Service (NWS) said. “This will result in colder air to filter into the area, changing rain and freezing rain back to snow along with increasing winds from the north.

“Up to a foot of snow is possible across northern Maine by the time the storm moves further away into the Canadian Maritimes on Thursday. Colder air will usher into much of the eastern U.S. as the storm moves away and a high pressure ridge builds in from the Plains.”

According to NatGasWeather for January 9-15, “A strong cold front will push across the Great Lakes and Northeast the next several days with lows behind the cold front reaching the 0s to 20s for strong demand. However, much of the rest of the country will be mostly mild with highs of 40s to 70s to counter. A weather system will track into the West Coast the next few days with rain and snow, but with only slight cooling. This weekend into early next week will bring a reinforcing cold shot across the East, followed by rapid warming mid-week, while the rest of the country remains mostly mild. Overall, national demand will be increasing to moderate-high late this week into early next week.”

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.

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.

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.”

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 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.

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 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 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 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.