Friday, January 15, 2016

Natural Gas: EIA Weekly Supply/Demand Report (and a long trade for the nimble)

As I mentioned on Tuesday:
Front futures 2.256 down .140. We've been standing aside* as the cold heads to Europe....
Well the cold most definitely went east of the NYMEX. This morning's headline at the Telegraph:
UK weather: temperatures to plunge as cold snap tightens its grip
And the Feb. futures are down to 2.108, off another 3.1 cents.
Here's the Energy Information Administration with some discussion:
(For the Week Ending Wednesday, January 13, 2016) 
Outside of the Northeast, natural gas spot prices fell at most trading locations during the report week (Wednesday, January 6, to Wednesday, January 13). The Henry Hub spot price fell from $2.35 per million British thermal unit (MMBtu) last Wednesday to $2.30/MMBtu yesterday.

At the New York Mercantile Exchange (Nymex), the price of the near-month (February 2016) contract rose by less than a penny, from $2.267/MMBtu last Wednesday to $2.269/MMBtu yesterday. 
Working natural gas in storage decreased by 168 Billion cubic feet (Bcf), declining to 3,475 Bcf as of Friday, January 8. The net withdrawal from storage resulted in storage levels 20% above a year ago and 16% above the five-year (2011–15) average for this week.

The total oil and natural gas rig count declined by 34 units this week, with 664 units in service for the week ending Friday, January 8, according to data from Baker Hughes Incorporated. The oil rig count decreased by 20 units to 516, and the natural gas rig count fell by 14 units to 148. The oil and natural gas rig count has not been this low since August 1999.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 0.7% to $4.18/MMBtu for the week ending Friday, January 8. The prices of ethane and butane increased by 3.6% and 0.5%, respectively. The natural gasoline price fell by 5.0%, isobutane fell by 0.4%, and the propane price fell by 0.2%.
more summary data
Prices fall slightly at most points outside of the Northeast. The Henry Hub spot price fell from $2.35/MMBtu last Wednesday to $2.30/MMBtu yesterday. Midweek, however, the Henry Hub price rose to higher levels, settling at $2.53/MMBtu on Monday, likely because of colder temperatures in much of the United States. Price patterns were similar at other major trading hubs. The natural gas price at the Chicago Citygate began the week last Wednesday at $2.42/MMBtu, rose to a mid-report week high of $2.59/MMBtu on Friday, and settled at $2.32/MMBtu yesterday. On the West Coast, the price at the PG&E Citygate began the week at $2.82/MMBtu, rose slightly in the middle of the report week, and ended yesterday at $2.55/MMBtu....

There's another blast of cold heading for the American Midwest this weekend and our old pal, the Arctic Oscillation remains negative, allowing the cold to come down from the poles, so there's a long trade for the nimble.
Observed Daily Arctic Oscillation Index.