Friday, February 3, 2017

Natural Gas: EIA Weekly Supply/Demand Report

Coming into the Spring shoulder injection season the hope of a widowmaker* trade helps to build anticipation for Eliot's cruelest month. Until then the two week national temperature forecast is above average putting downward pressure on prices while the prospect of a trade war with Mexico raises the risk to southbound U.S. gas exports.
Ah spring.

3.0560 down 0.1310
From the Energy Information Administration:
(For the Week Ending Wednesday, February 1, 2017)
  • Natural gas spot prices fell at most locations this report week (Wednesday, January 25 to Wednesday, February 1). The Henry Hub spot price fell from $3.25 per million British thermal units (MMBtu) last Wednesday to $3.12/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the February 2017 contract expired Friday at $3.391/MMBtu. The March 2017 contract decreased to $3.168/MMBtu, down 18¢ Wednesday to Wednesday.
  • Net withdrawals from working gas totaled 87 billion cubic feet (Bcf) for the week ending January 27. Working natural gas stocks are 2,711 Bcf, which is 9% less than the year-ago level and 2% greater than the five-year (2012–16) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 4¢, closing at $6.67/MMBtu for the week ending January 27. The prices of natural gasoline and ethane fell by 14% and 12%, respectively. The prices of propane, butane, and isobutane rose by 5%, 13%, and 11%, respectively.
  • According to Baker Hughes, for the week ending Friday, January 27, the natural gas rig count increased by 3 to 145. The number of oil-directed rigs rose by 15 to 566. The total rig count climbed by 18, and it now stands at 712.
Prices fall everywhere outside the Northeast. This report week (Wednesday, January 25 to Wednesday, February 1), the Henry Hub spot price fell 13¢ from $3.25/MMBtu last Wednesday to $3.12/MMBtu yesterday. Temperatures moderated throughout the report week almost everywhere except for in the Northeast. As a result, prices generally fell Wednesday to Wednesday.
At the Chicago Citygate, prices decreased 14¢ from $3.22/MMBtu last Wednesday to $3.08/MMBtu yesterday. Prices at PG&E Citygate in Northern California fell 16¢, down from $3.66/MMBtu last Wednesday to $3.50/MMBtu yesterday....

...Supply remains flat. According to data from PointLogic, the average total supply of natural gas remained the same as the previous report week, averaging 76.3 Bcf/d. Dry natural gas production remained constant week over week. Average net imports from Canada decreased by 1% from last week....

*In natural gas the Widowmaker term originally came from the March-April calendar spread where the premium/discount can swing 20% based on a couple weather rumors and you might see several flips from backwardation to contango and back in a week.. Now it is used to refer to the whole darn curve and any point on it.