Natural gas futures has fallen sharply since retesting $5.80 to $4.80 ahead of EIA reporting a build of +7Bcf of working gas in storage. U.S. LNG exports of LNG continue to grow with weather pressures continuing globally.
Natural gas futures has fallen sharply since retesting $5.80 to $4.80 ahead of EIA reporting a build of +7Bcf of working gas in storage. U.S. LNG exports of LNG continue to grow with weather pressures continuing globally
EIA’s Weekly Gas Storage Report.
- Report Date: 11/4/2021 Via TradersCommunity.com
- Release Time: Wednesday 11/4/2021 12:00 a.m. ET
- 11/11/2021 (Thursday) is Veterans Day
- Actual +7 Bcf Prior +63 Bcf
- Consensus Forecast +12 Bcf
- Cons. Range: +07 to +15 Bcf
- Last Year: +36 Bcf
- 5 Year Average: +53 Bcf
Broken down by region
- South Central region 3 Bcf increase -2 Bcf in nonsalt facilities and 4 Bcf in salts
- Midwest 4 Bcf increase
- East -2 Bcf decrease
- Mountain 0 Bcf increase
- Pacific 2 Bcf increase
Current Storage Level vs. Last Year; 5-Yr
- Current Storage Level: 3,618 Bcf
- Storage 2020/Same Week: 3,926 Bcf
- 5Yr Avg/Same Week: 3,737 Bcf
The energy crisis pounding the world with unheard of prices is impacting the domestic pricing, at least speculation of US natural gas. U.S. fundamentals only have the domestic gas market in bear territory with mild weather and low demand. All eyes seem to be overseas as the market with the storage trajectory in the final weeks of the injection season.
Via Ole S Hansen @Ole_S_Hansen
Weather models show below-normal temperatures in southeastern Europe and warmer-than-normal readings for West and Northeast Europe. Maxar’s Weather Desk on ensemble models says “in generally good alignment, yielding average overall forecast confidence.” The counter is the Canadian Ensemble proposes warmer temperatures than forecast in places like Germany and France, according to the Weather Desk. “A negative phase of the Scandinavia pattern may play a role on the pattern here, and this offers the risk for cooler temperatures in the North.” NatGasWeather said if forecasts turn chillier for late October or early November over the next seven to 10 days, “a renewed push higher for the front month is likely.”
“A weather-roiling La Nina appears to have emerged across the equatorial Pacific, setting the stage for worsening droughts in California and South America, frigid winters in parts of the U.S. and Japan and greater risks for the world’s already strained energy and food supplies. The phenomenon—which begins when the atmosphere reacts to a cooler patch of water over the Pacific Ocean—will likely last through at least February, the U.S. Climate Prediction Center said Thursday. There is a 57% chance it be a moderate event, like the one that started last year, the center said. While scientists may need months to confirm whether La Nina has definitely returned, all the signs are indicating it’s here.” October 14 – Bloomberg (Brian K. Sullivan)
Forecasts on Friday tilted colder for early November in the Midwest and Northeast, speculating that heating needs in those key regions could begin to mount and drive stronger demand. Bespoke Weather Services said “We continue to see models step up the level of blocking in the high latitudes into early November, which, while not making things all that cold right here and now, increases the risk that some colder than normal air finally gets involved down the road,” “Thus, the changes seen are potentially more bullish.”
The National Hurricane Center said over the next few months as the 2021 Atlantic hurricane season reaches its peak. The National Oceanic and Atmospheric Administration raised the number of named storms forecast to 15-21 named storms, including seven to 10 hurricanes and three to five major hurricanes, up from its May prediction for 13-20 named storms and six to 10 hurricanes, though its prediction of major hurricanes was unchanged.
With storms we watch Gulf of Mexico production and the impact on demand with the increasingly tight U.S. gas market. In 2020 back-to-back hurricanes in Louisiana knocked offline the Cameron LNG facility, as well as thousands of other Gulf Coast electricity customers for about a month.
Renewable generation coming in well below normal
Wind capacity is up more than 15 GW versus 2020. Wood Mackenzie analyst Eric Fell said nuclear and renewable generation fell by a massive 30 average GWh (AGWh) week/week to the lowest levels of the year, and well below the five-year average. “Wind was the biggest culprit, with unusually low wind output for the week”. Wind generation fell 23 AGWh and matched the record for the largest week/week decline that was set in June. Weekly wind output was so low for the week that it came in even lower than it did during Winter Storm Uri in February, when a lot of turbines were frozen. Of note though wind-driven tightness in the latest storage report is likely to be reversed in the next EIA report as wind generation is seen staging a substantial rebound. “We are on pace to see the largest ever week/week increase in wind generation,” Fell said. However, it is unlikely that wind utilization would remain that far below normal over the balance of the summer. Hydro output has averaged close to 7 average GW hours below the five-year average so far this summer, according to Fell. This is being driven by a severe western drought, which has added nearly 1 Bcf/d in gas burn relative to the five-year average.
Baker Hughes active rigs total in the U.S. onshore and Gulf of Mexico (GOM)
- Total 556 (est 556; prev 550)
- Rotary Oil Rigs: +4 to 454 (est 455; prev 450)
- Rotary Gas Rigs: +2 to 102 (est 100; prev 100)
US Oil Rigs w/w changes by key shale basins
- Permian unchanged at 271
- Eagle Ford +1 to 38
- Williston unchanged at 24
- Cana Woodford +2 to 24
- DJ Niobrara unchanged at 12
Comments by executives of multi-basin super independent EOG Resources Inc. mirrored those for many Lower 48 management teams.
“We’re not going to grow until the market clearly needs the barrels,” EOG President Ezra Yacob told analysts during a call Thursday. “We’re committed to staying disciplined. Currently, we want to see demand return to pre-Covid levels.”
TradersCommunity Natural Gas Outlook Format
- EIA Natural Gas Storage Forecast and Analysis
- LNG and Export Warch
- Natural Gas Import Watch
- Natural Gas Demand Watch
- Nuke Watch
- Natural Gas Futures Technical Analysis
- Option Vol
- DCOT Report
Natural Gas Market Influence Factors:
Bearish factors include
- Economic damage and reduced natural gas demand caused by the Covid pandemic,
- Warm U.S. winter that resulted in weak demand for natural gas for heating.
- Over long spec positions
Bullish factors include
- Record foreign demand for U.S. nat-gas as flows to U.S LNG export terminals on April 18 rose to a record 11.921 bcf (data from 2014) and after U.S. LNG exporters loaded a record 81 cargoes in November, breaking the previous record of 75 set January of 2020,
- Expectations that the low level of oil prices will reduce shale drilling and natural gas extraction as a by-product
- Tighter U.S. nat-gas supplies that are down -14.8% y/y and -2.6% below their 5-year average.
- High power burns
- Perception that gas supply and demand are more inelastic than ever before.
- Over short spec positions
Gulf of Mexico
Near Record Warm Gulf of Mexico Water temperatures are running 1-3+ degrees above average
Paths of Recent Gulf Hurricanes
Natural Gas Quick Look
via Ole S Hansen @Ole_S_Hansen
EIA Natural Gas Storage Watch
- Bloomberg Survey +105
- DJ Survey +
- Reuters Survey +115
- Platts Survey+
Banks and Brokers
- Cti +
- TFS +
- AgWxMan +
- Refinitiv +
- Bart Roy +119
- Genscape +
- Gabe Harris –
- WoodMac +
- Kidduff Report +
- Platts GW +
- Robry825 +
- The Pit Boss +104
- Norse +
- Andrea Paltry +
- Point Logic +
- Bespoke +
- Shane Boling +
- Schneider Electric +
- Donnie Sharp Huntsville +
- NG Junkie –
- EBW +
NB: Forecasts uploaded when provided to TradersCommunity.com – some weeks they may not made available.
EIA Swap Market – Brynne Kelly @BrynneKKelly
Henry Hub Natural Gas Futures Weekly Chart Outlook via @KnovaWave
US Natural Gas (Henry Hub)
US Natural Gas (Henry Hub)
4 Hour:: A look at that daily ABC on the 240 shows the waves clearly in the Murrey Math grid with the cloud the guide for higher (the IV) or Lower the A – meaning this is a B. Note impulses off Kijun/Tenkan crosses Recall natural gas spitting to +8/8 than +1/8 240 before retreating in 3 waves to spit violently the 50 4hr ma stayed above the cloud until the completive 5 and back in the channel in a continuation pattern since regaining the 240 cloud to rebalance the Chikou to close the week. Continue to watch Kijun reactions and Murrey Math confluence.
Daily: US Natural Gas has completed 3 waves correcting the daily 8/8 spit after a classic euphoria wave 5 to comeback to test Kijun and bounce between it and Tenkan with power before spitting the 50dma in a corrective ABC pennant of a (IV). Alts are IV or A at this juncture Notice the fractals of the move after completing the C of 4 bullish scenario has played out the consolidation phase since it completed its IV ( Bull Case) last year since then a series of 3 waves. Should the highs be a (iii) looking at possibilities we have the 161.8% at 7.026 if we get ‘silly’ 50dma support.
Like the larger wave on the way up it accelerated through previous highs (flat topped triangle energy) and over the resistance at 8/8 and new highs. We successfully tested that break in a pennant ABC. Previous highs (flat topped triangle energy) and 8/8 and new highs underscore the structure that fed the move and is key longer term.
Weekly: Going out further we see a spit of the weekly Tenkan for Natural gas continued off it’s major target, the double top potential from 2014 which equated nicely to over 8/8 Weekly and showed true impulse off that to rebalance Chikou. It’s now a question of degree, 3 or 5? Impulse just shy of the 8/8 and Tenkan confluence. Recall the impulse wave powered from the spit of 50wma to get over weekly Kijun and Tenkan. This was energized with a series of fractals between old 38 and 50% channel, as you would expect in a seasonal commodity with weather a prime mover. Resistance is Fib/Murrey confluence, support Tenkan, Kijun – as always count your ABC’s
Natural Gas Storage Analysis
via RonH Data @ronh999
via Brynne Kelly @BrynneKKelly
Natural Gas Production Watch
Natural Gas LNG Watch
“While year-over-year net exports ran 4.0 Bcf/d higher in April and May, the increase in net exports accelerated to 6.3 Bcf/d in June and 8.4 Bcf/d month-to-date in July,” the EBW team. “Although the dramatic increase was telegraphed to the market in advance, the increase in LNG and pipeline exports to Mexico draws almost exclusively from the South Central region — placing upward pressure on Henry Hub.”
via Criterion @Pipelineflows, RonH Data @ronh999
Natural Gas feed to LNG facilities Sabine Pass, Cameron, Elba Island, Cove Point & Corpus Christi
LNG netbacks for deliveries from the US Gulf Coast to Asia and Europe have surged above $9/MMBtu in recent days, up from around $8/MMBtu at the beginning of the month and around $7/MMBtu at the beginning of July. JKM, the benchmark price for spot LNG delivered to Northeast Asia, was assessed at $16.95/MMBtu on Aug. 13.
The run-up has led to a flurry of medium-term commercial transactions in recent months tied to US volumes that are linked to the JKM. Gas deliveries to US LNG export terminals totaled 10.91 Bcf/d on Aug. 13, based on the morning cycle, Platts Analytics data showed. That was up 540 MMcf/d from the day before and was the highest level since July 30. The increase came after production ramped up at Cheniere Energy’s Sabine Pass and Sempra’s Cameron LNG, both in Louisiana, and at Freeport LNG in Texas. – S&P Global Platts
In July 2020, US LNG facilities averaged 3.22 Bcf/day natgas inflow and 3.00 Bcf/day of LNG exports loaded on tankers. Lowest since Oct 2018. via https://public.tableau.com/profile/ron.h8
++Charts via RonH @RonH999 – Visit Ron for daily updates
Natgas inflow and LNG Exported by US LNG facilities Sabine Pass, Cameron, Cove Point & Corpus Christi avg Bcf/day/month.
U.S. liquefied natural gas exports were at record high levels in the first half of 2021
For Full LNG Outlook Please Visit ourLNG Weekly Here
Natural Gas Mexican Exports Watch
via RonH Energy
US natural gas exports to Mexico established a new monthly record in June 2021
Natural Gas Canada Import Watch
via RonH Energy
Natural Gas Demand Watch
US Feb 2021 pwCDD + gwHDD were 905. That is +111 vs the long term avg.
via RonH Data @ronh999
For Greater Depth Visit our Natural Gas Demand Monitor Here
US Feb Natural Gas demand by category.
Natural Gas Nuke Watch
via RonH Data @ronh999
ALERT Three Mile Island nuclear shut down permanently on Friday afternoon 9/292019. US nuclear output for Sep 23 88,466.6 MW. This is -532.8 MW vs 5yr avg.
Natural Gas Options Structure – Volatilty (COT)
NYMEX ON NATURAL GAS OPTIONS CommodityVol.com @CommodityImpVol
Natural Gas Futures Committment of Traders (COT)
Latest ICE and CFTC Open Interest Data:
Understanding DCOT Reports
Read Understanding Commitments of Traders Reports – COT, TFF and DCOT to help understand the disaggregated reports (DCOT) and how they break down the reportable open interest positions into four classifications: 1. Producer/Merchant/Processor/User 2. Swap Dealers 3. Managed Money 4. Other Reportables
Natural Gas DCOT futures only managed money traders WoW change
(Note at NG peak Highest Longs Ever 87% (since 2006) Lowest Longs 2020 24%)
- For week ending Nov 2
- Natgas DCOT futures only managed money traders WoW change
- -6,571 longs
- +2,373 shorts
- -8,944 net change
- 48% net long
Read Understanding Commitments of Traders Reports – COT, TFF and DCOT to help understand the disaggregated reports (DCOT) and how they break down the reportable open interest positions into four classifications:
1. Producer/Merchant/Processor/User 2. Swap Dealers 3. Managed Money 4. Other Reportables
Sources: TradersCommunity Research, RonH Energy, The Fundamental Edge, Knovawave
From the Traders Community Research Desk