Thursday, May 23, 2013

Natural Gas Pop-n-Drop on EIA Storage Report

As the Enron guys used to tell the analysts, "I don't care what you think the number is, I want to know what everyone else thinks the number is". Earlier today the folks that we are finding to be most accurate among the public prognosticators, Energy Metro Desk (hosted on the CME's 'puters no less) came out with their estimate:

Each week, we poll 40 professional storage forecasts for our weekly Natural-Gas Storage Box Scores (as seen in each bi-weekly issue of Energy Metro Desk*). This is North America's biggest and most comprehensive natural-gas storage survey and report.
Energy Metro Desk editors forecast this week:  +88 Bcf
Average: +90 Bcf
Median: +91 Bcf
Range: +82 to 101 Bcf 
The EIA reported an injection of 89 Bcf , not a bad estimate eh? Well here's what the algos did with the report:

Trading the release is getting harder and harder.
Here's the EIA:

Weekly Natural Gas Storage Report
for week ending May 17, 2013.   |   Released: May 23, 2013 at 10:30 a.m.   |   Next Release: May 30, 2013

Working gas in underground storage, lower 48 states Summary text CSV JSN

Historical Comparisons
billion cubic feet (Bcf)

Year ago
5-Year average
Region 05/17/13 05/10/13 change
(Bcf) % change (Bcf) % change
East 857 811 46
1,275 -32.8 968 -11.5
West 368 357 11
397 -7.3 319 15.4
Producing 828 796 32
1,061 -22.0 850 -2.6
   Salt 239 228 11
254 -5.9 160 49.4
   Nonsalt 589 569 20
807 -27.0 690 -14.6
Total 2,053 1,964 89
2,733 -24.9 2,137 -3.9

And here's Energy Metro's commentary:
Current Storage Level: 1,964 Bcf
Surplus under 2012: 694 Bcf (26%)
Surplus over 5 Yr Avg: 83 Bcf (4%)
Natural Gas Storage Tealeaves
For the past three weeks EIA has come in on the high side of the market consensus. We're of the mind that we won't see a fourth straight week of high-side risk. The range of forecasts is around 20 Bcf, which isn't anything extrordinary. The range between the three categories we track is tiny -- 1.3 Bcf. Demand and supply looks a lot like last week or at least the various categories seem to balance each other out nicely, the temps and the nuke outages and so on. The free radical in this week's sweeps is more about past EIA misfires and true-ups, than anything else. Folks seem convinced we'll not see a report to the high-side of the market four weeks in a row -- it's something we've not seen before. We tend to agree. We see risk slightly to the low side of things this week. Our Consensus is slightly lower than most of the other big surveys; we're at 90 Bcf; Reuters came in at 91; Bloomie at 92; PLatts at 92 and SNL at 93 Bcf. The lowballer among surveys is DJ at 89 Bcf. Our editor is even lower at 88 Bcf. We think 86-90 Bcf will be right on the money this week. Check out the CME charts below -- some wild pre-report and post-report action last year--really crazy stuff. Judging from the volumes, we say it was HFT's gone wild yet again. Bet we see the same thing this week. For whatever reason, this particular week in history (the last 6 years) has produced some nutty volitility. Just saying. -- the editor

Weather Tealeaves
Thought of the day:  Stronger Summer Start.
"The start of meteorological summer is next Saturday, and the latest dynamic models show building consensus that we will be engaging in another widespread heat event from the Plains to the Midwest and East Coast. The Deep South should also partake in the heat, but there are still signs of cooler risks below the main core ridge especially along the Gulf Coast. Given the calendar and coverage offered by the pattern type, this should be the strongest heat event so far this season with potential for more 90s into parts of especially the southern Midwest to lower Mid-Atlantic, but potentially farther north as well. By late in the 11- 15 day, trends continue to build new heat ridging toward the Western U.S. which allow the Eastern heat ridge to deteriorate and set up a possible cooler...MORE