November 8 through 20
And the expectations for yesterday's storage report via FX Empire:
...A consensus of estimates are pointing to a build of around 45 Bcf in today’s U.S. Energy Information Administration (EIA) weekly storage report, due to be released at 15:30 GMT, for the week-ending November 1.The EIA reported a build, despite the chilly weather, of 34 Bcf .
A year-ago the EIA reported a 63 Bcf injection, which compares with a 57 Bcf five-year average.
Bloomberg analysts are calling for a median prediction of 45 Bcf, with estimates ranging from 31 Bcf to 51 Bcf. The ICE EIA Financial Weekly Index futures settled Tuesday at 43 Bcf. Natural Gas Intelligence (NGI) is calling for a build of 44 Bcf. My estimate is for a build of 46 Bcf.
Energy Aspects issued a preliminary estimate for a 40 Bcf build for the period ended November 1. Analysts at Tudor, Pickering, Holt & Co (TPH) called for a 47 Bcf build for this week’s EIA report. An injection in this range is “not materially different from norms” around 56 Bcf, the TPH team said....
Back to chilly, the pattern above is what we were babbling about in Monday's " Grains & Gas: Temperature Forecast"
Following up on last night's "Natural Gas Short From Thursday: Abort, Abort", here is a temp forecast via one of NOAA's fancier models:....
***
....We entered the short
saying "The market is trading off the cold snap and the cold snap is
not going
to last" because we are currently experiencing a meridional (north -
south) jet stream that progresses in stately fashion from California to
New York, alternating cold and warm:
The meridional pattern can set up a nice long-then-short-then long sequence in natural gas futures trading.That's the weather report, here's the Energy Information Administration
Except when it dips too far and you have Texas guzzling gas like Minnesota. Or if the pattern stalls and the warmth is delayed.
Or if it changes to a zonal pattern.
Natural Gas Weekly Update
for week ending November 6, 2019 | Release date: November 7, 2019 |
In the News:....MUCH MORE
Net injections post second-largest refill season on record; working gas stocks end refill season higher than the five-year average
Near-record injection activity during the 2019 natural gas refill season (April 1–October 31) resulted in a rapid recovery of working gas stocks from their relatively low level at the end of the 2018–19 heating season. Working natural gas in storage in the Lower 48 states as of October 31 totaled 3,724 billion cubic feet (Bcf), according to interpolated data from EIA’s Weekly Natural Gas Storage Report released November 7. Total inventory as of October 31 was 37 Bcf higher than the five-year (2014–18) end-of-October average and 527 Bcf (16%) higher than last year at this time. Although the end of the natural gas storage injection season is traditionally defined as October 31, injections often occur in November.
A low starting inventory level has historically preceded strong refill seasons, and 2019 followed this pattern. Working natural gas stocks ended the withdrawal season this year on March 31 at 1,155 Bcf—the second-lowest level reported since 2004. From April 1 through October 31, 2019, EIA estimates that net injections totaled 2,569 Bcf. Net injections were 678 Bcf (36%) higher than the five-year average and 732 Bcf (40%) higher than net injections last year. This level was the second-highest net injected volume for the refill season ever reported, falling just short of the record level of 2,727 Bcf injected during the 2014 refill season. In 2014, working gas stocks ended the winter at 837 Bcf—the lowest level since 2003—and ended the refill season at 3,564 Bcf.
Continued strength in natural gas production during 2019 accounted for the large increase in natural gas storage volumes during 2019 despite increases in natural gas demand, which were primarily driven by natural gas-fired power generation increases, greater pipeline exports to Mexico, and growing liquefied natural gas (LNG) exports. The larger injections into working gas storage reduced the deficit to the five-year average, which exceeded 500 Bcf entering the refill season, and resulted in working gas inventories exceeding the five-year average on October 11—the first time since 2017.
The working gas difference to the five-year average tends to be negatively correlated with the Nymex near-month natural gas futures settlement price. Stocks that are high compared with the five-year average often correlate with lower natural gas futures prices. Conversely, stocks that are low compared with the five-year average usually correspond to higher natural gas futures prices.
This relationship is visualized as a scatterplot with natural gas futures prices on the y-axis and the level of stocks compared with the five-year average on the x-axis. Each dot represents a week, and the dots are color-coded to reflect different years. Pricing patterns have varied somewhat during 2019. Earlier this year, larger storage deficits, which exceeded 250 Bcf, were associated with futures prices ranging between $2.50 per million British thermal units (MMBtu) and $3.41/MMBtu. As the deficit to the five-year average diminished during the course of the refill season, prices eased somewhat, and the futures contract for next-month delivery at the Henry Hub generally traded lower than $2.50/MMBtu. Early season cold weather increased futures prices somewhat in recent weeks.
Overview:
(For the week ending Wednesday, November 6, 2019)
Prices/Supply/Demand: Prices rise at most trading hubs. This report week (Wednesday, October 30 to Wednesday, November 6), the Henry Hub spot price rose 11¢ from $2.67/MMBtu last Wednesday to a high of $2.78/MMBtu yesterday. Temperatures were generally cooler than normal across the Lower 48 states. At the Chicago Citygate, the price increased 29¢ from $2.69/MMBtu last Wednesday to a high of $2.98/MMBtu yesterday....
- Natural gas spot prices rose at most locations this report week (Wednesday, October 30 to Wednesday, November 6). The Henry Hub spot price rose from $2.67/MMBtu last Wednesday to $2.78/MMBtu yesterday.
- At the New York Mercantile Exchange (Nymex), the price of the December 2019 contract increased 14¢, from $2.691/MMBtu last Wednesday to $2.828/MMBtu yesterday. The price of the 12-month strip averaging December 2019 through November 2020 futures contracts climbed 7¢/MMBtu to $2.567/MMBtu.
- Net injections to working gas totaled 34 Bcf for the week ending November 1. Working natural gas stocks are 3,729 Bcf, which is 17% more than the year-ago level and 1% more than the five-year (2014–18) average for this week.
- The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 36¢/MMBtu, averaging $5.65/MMBtu for the week ending November 6. The price of propane, ethane, butane, and isobutane rose by 10%, 9%, 9%, and 6%, respectively. The price of natural gasoline remained flat week over week.
- According to Baker Hughes, for the week ending Tuesday, October 29, the natural gas rig count decreased by 3 to 130. The number of oil-directed rigs fell by 5 to 691. The total rig count decreased by 8, and it now stands at 822.
The front futures have rolled over but without conviction after hitting 2.9050 on the 5th:
$2.7990 last
