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Why NG falling n crude up?

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Monday & Tuesday, September 21st & 22nd, Natural Gas fell more than 10%.

Wednesday, suddenly, fundamentals changed?

Natural Gas Prices Explode On Stronger Demand

By Julianne Geiger - Sep 23, 2020, 1:00 PM CDT

https://oilprice.com/Energy/Natural-Gas/Natural-Gas-Prices-Explode-On-Stronger-Demand.html

Rallying from a seven-week low in the prior session, natural gas futures rose more than 15% on Wednesday afternoon as the demand outlook for natural gas improves.

At 1:16 p.m. EDT, front-month natural gas futures rose by $0.270 to $2.104—up from its $1.845 open. Buyers will no doubt have their eye on that $2 threshold.

According to Refinitiv data, U.S. production of natural gas was on track to fall to its lowest in two years on Wednesday, to 83.8 bcfd.

On top of that, according to the same Refinitiv data, U.S. pipeline exports to Mexico were on track to reach 6.0 bcfd this month, compared to 5.9 bcfd last month. Total demand, including exports, is expected to reach 84.4 bcfd next week, from 82.0 bcfd this week.

Further bullish signals were sent to the market after Tropical Storm Beta came and went, leaving vessels free now—at least in some areas--to dock in the Gulf of Mexico, which has seen its fair share of disruptions this hurricane season. Some LNG facilities still remain shut-in as Beta moves its way through Texas after weakening to a post-tropical cyclone.

LNG feedgas, too, averaged 5.4 bcfd so far this month—the most since May and the second increase in a row.

At 1:28 p.m. EDT, Henry Hub spot prices were $2.107, up $0.273, or 14.89% on the day.

The U.S. government storage report for Thursday is expected to show another bang-up number for the week ending September 18, with gas in storage possibly exceeding 4.0 trillion cubic feet—a high figure that would be hundreds of billions of cubic feet above year-ago levels and hundreds of billions of cubic feet above the five-year average.

By Julianne Geiger for Oilprice.com

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Everything Points To More Natural Gas Demand This Decade

By Tsvetana Paraskova - Sep 23, 2020, 4:00 PM CDT

https://oilprice.com/Energy/Natural-Gas/Everything-Points-To-More-Natural-Gas-Demand-This-Decade.html

Natural gas has often been vilified as just another fossil fuel contributing to the climate crisis. 

While gas-fired power generation and the natural gas value chain do emit greenhouse gases, natural gas burns cleaner than other fossil fuels, most notably coal, and can play a major role in replacing coal-fired power generation, immediately contributing to lower emissions from the electricity sector.    

Natural gas also has an important role to play in helping power grids with flexible and reliable baseload that is capable of meeting peak demand, securing grids and ensuring they will be capable of accommodating a growing share of renewable energy generation, mostly from solar and wind.  

All scenarios point to renewables growing at the fastest pace over the coming decades—there is no doubt about this. But if grids are to be able to handle the surge in renewable power sources, they need to be flexible and resilient to provide power even when the sun doesn’t shine or the wind doesn’t blow.  

With coal on the path of irreversible decline in developed economies such as the United States and Europe, natural gas could save the day, replacing coal to ensure that grids can handle growing shares of renewable power, at least until major breakthroughs in energy storage potentially limit the need of stable fossil fuel power generation 24/7 which could also meet peak demand. 

Until renewables can power up 100 percent of electricity, if they ever could, and until cost-efficient, large-scale, and reliable energy storage solutions are found, every part of the world – from the top U.S. solar state California to every state in India – will continue to need natural gas in their power mix, regardless of whether they like it or not, Mark Le Dain, VP Strategy at energy tech firm Validere, writes in Forbes California, the largest U.S. solar state which has an ambitious program to drastically cut emissions and boost the share of renewables in its power generation, became this summer a textbook example of having to rely on some part of natural gas generation because there wasn’t sufficient energy to meet the high demand during the heatwave. 

In August, California energy consumers were warned of rolling outages. At the start of September, the State Water Resources Control Board extended the phase-out dates of four natural gas-fired plants of one to three years, saying that “The plants are needed to provide more energy grid stability and reliability, as additional energy and storage resources are built over the next three years.”  

Related: Why Russia Is Pushing Unneeded Nuclear Power Plants On Egypt

“We need to pay attention to the integrity of the electrical grid. Because if we do not, we are going to lose this whole green thing we’re doing. We’re going to lose the public,” Patrick O’Donnell, a state Assemblyman from Long Beach, told the California water board, as carried by the Los Angeles Times

In other words, consumers want reliable electricity supply. Natural gas can help with that and even contribute to lowering emissions if it continues to replace coal-fired generation. 

Between 2011 and 2019, as many as 103 coal-fired power plants were converted to natural gas or replaced by natural gas-fired plants in the United States, EIA estimates. 

Due to the rapid replacement of coal with natural gas, U.S. energy-related CO2 emissions saw the largest decline among all countries, 2.9 percent, in 2019, the International Energy Agency (IEA) says.

Last year, natural gas accounted for 38.4 percent of U.S. utility-scale electricity generation, followed by coal with 23.5 percent, nuclear with 19.7 percent, and renewables including hydropower with 17.5 percent. 

Through 2050, natural gas is set to keep its share at around 36 percent, according to the reference case in EIA’s Annual Energy Outlook covering forecasts until 2050. However, over the next 30 years, coal is set to lose more than 10 percentage points of market share and slump to 13 percent of power generation, while renewables are set to jump to 38 percent and surpass natural gas in the mix.  

In the largest energy-hungry developing economies, India and China, the share of coal is set to decline through 2050 in all three scenarios, according to BP’s Energy Outlook 2020. Renewables--and to a lesser extent, gas--will be the key growth energy sources, according to BP. 

Natural gas is by no means a clean fuel, but it is cleaner than coal and could support a greater global transition to renewable energy.   

By Tsvetana Paraskova for Oilprice.com

https://oilprice.com/contributors/Tsvetana-Paraskova

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(edited)

41 minutes ago, Tom Nolan said:

...natural gas burns cleaner than other fossil fuels, most notably coal, and can play a major role in replacing coal-fired power generation, immediately contributing to lower emissions from the electricity sector.    

Mercury in Fish -

One of the major sources of mercury in fish is from the burning of coal.   Mercury is in coal.  When burned, it goes into the atmosphere and comes down in the rain.  When at Texas A&M with my Environmental Sciences degree (circa 2005-2008), I helped with campaigns to lower the number of coal burning power plants in Texas.

At the time, Robert F. Kennedy, Jr. was one of the most active Environmental Scientists and Attorneys fighting the coal industry because of mercury pollution in our waterways.  An Environmental Attorney has an incredible amount of training with U.S. codes and EPA regulations and law.  

His WEBSITE used to be called  "The World Mercury Project".  

That website name has now changed to Children's Health Defense.org   https://childrenshealthdefense.org/known-culprits/mercury/thimerosal-history/thimerosal-faq/

QUEUED VIDEO to MERCURY and COAL

 

 

Edited by Tom Nolan
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Natural Gas Prices Jump Again On Smaller-Than-Forecast Stock Build

By Tsvetana Paraskova - Sep 24, 2020, 11:30 AM CDT

https://oilprice.com/Energy/Natural-Gas/Natural-Gas-Prices-Jump-Again-On-Smaller-Than-Forecast-Stock-Build.html

After surging more than 15 percent to over $2 per million British thermal units (MMBtu) on Wednesday, U.S. front-month natural gas futures rose by another 5 percent by mid-day on Thursday, after the EIA reported a smaller-than-expected natural gas injection into storage.

As of 12:30 p.m. EDT on Thursday, the front-month Henry Hub futures price was $2.239/MMBtu, up by 5.27 percent on the day.  

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Earlier on Thursday, the EIA issued its weekly natural gas storage report, showing a net increase of 66 billion cubic feet (Bcf) from the previous week in U.S. working gas in storage as of September 18. At 3.680 trillion cubic feet, working gas in storage is above the five-year historical range, but last week’s net increase in storage was lower than the 78-bcf build that a Reuters poll of analysts had expected.  

This week, natural gas prices have seen some extreme volatility, from a 10-percent plunge on Monday, to a 15-percent surge on Wednesday, also due to the rollover of the October futures contract expiring on September 28, with traders rolling out of the October contract to the November contract of higher prices.

Lower natural gas production and expectations of increased exports via pipeline to Mexico and tankers of liquefied natural gas (LNG) also supported natural gas prices on Wednesday and Thursday.

In addition, the LNG gas feed is also set to rise to 5.7 bcfd on Thursday from 3.9 bcfd on Tuesday, which was a two-week low due to Tropical Storm Beta earlier this week.

Expectations of cooler weather in some parts of the U.S. next week also lent support to natural gas futures on Thursday.

“A major pattern change will occur mid-next week as a strong early season cool shot pushes into the Midwest and Northeast with highs of 40s to 60s,” according to NatGasWeather.com.

By Tsvetana Paraskova for Oilprice.com

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How The Oil Crash Solved The Permian Pipeline Problem

By Tsvetana Paraskova - Sep 24, 2020, 6:00 PM CDT

https://oilprice.com/Energy/Crude-Oil/How-The-Oil-Crash-Solved-The-Permian-Pipeline-Problem.html

While Permian oil and gas production was soaring in 2018, U.S. midstream operators were planning and building pipeline takeaway capacity, expecting that the largest U.S. shale play would increase output for years to come, even if at a slower pace than before.

Pipeline companies rushed to invest in and complete new oil pipelines in the region to stay ahead of the booming Permian production. But they got ahead of themselves in boosting pipeline takeaway capacity. 

The black swan year of 2020 exposed the stark reality of the shale and pipeline construction boom. Current pipeline capacity in the Permian is exceeding production so much that in a year or two, when pipelines currently under construction are completed, Permian producers could find themselves using just half of the available takeaway infrastructure, according to analysts.

Pipeline Overbuild

Granted, oil pipeline infrastructure was already running ahead of Permian production at the end of last year, when output growth slowed down with many producers prioritizing profits over production as the capital markets and investors soured on footing the bill for explosive output growth without meaningful returns.

Then came the pandemic and the price crash in March 2020, forcing Permian exploration and production companies to curtail production, which has dropped from nearly 5 million barrels per day (bpd) as of March to an estimated 4.150 million bpd in September—a drop of around 700,000 bpd over the six months since oil prices collapsed.

After the crash, pipeline infrastructure companies started to announce deferrals of final investment decisions and start-up dates for planned oil and gas pipelines, especially in the Permian, which suddenly found itself with additional overbuild of capacity as production and consumption of oil struggled to recover from the pandemic-driven crisis. 

The latest announcement of a canceled oil pipeline came from Enterprise Products Partners, which said earlier this month that it was scrapping the 450,000 barrels per day Midland-to-ECHO 4 crude oil pipeline project.

But many of the pipelines planned back in 2018 are already in service and capacity was already exceeding production even if project deferrals and cancellations are taken into account.

“Permian oil infrastructure is already overbuilt. We anticipate that Permian oil output will recover to pre-COVID records of 4.9 million B/D by the end of the next year, but, even then, we will have 2 million B/D of unutilized outbound capacity,” Rystad Energy’s head of shale research Artem Abramov told the Journal of Petroleum Technology earlier this month.

Permian Crude Pipelines Face Years Of Low Utilization

According to midstream sector analytics company East Daley Capital, while the cancellation of Midland-to-ECHO 4 removes 450,000 bpd of future takeaway capacity from the Permian, this is just a small step in addressing a looming oversupply of the basin’s egress capacity. Currently, Permian crude oil supply is just over 4 million bpd, while the takeaway capacity exceeds 7 million bpd.

By early 2021, crude oil pipeline capacity is set to jump to 8.3 million bpd, which would be double the production in the Permian, East Daley’s estimates reported by The Wall Street Journal show.

According to Wood Mackenzie, long-haul crude oil pipelines between the Permian and the U.S. Gulf Coast were overbuilt even before this year’s price crash. Pipeline utilization in the biggest American shale basin is set to fall to 60 percent by October 2020, and stay at around that level until at least December 2021, Alex Beeker, WoodMac’s Principal Analyst, Corporate Research, said in June.

Oil Crisis Spills To All Sectors

The crash in oil prices and shale production spilled over to the midstream sector, which is now caught between falling oil production and pipeline utilization from the upstream and crumbling demand for fuels in the downstream. The midstream sector is reducing capex and deferring some pipeline projects, while analysts and industry executives say that the industry is set for a wave of consolidation with increased competition and weakened financial profiles of some operators.

Oil producers and oil infrastructure developers in the Permian – as well as everyone in the world – were taken by surprise in a “global pandemic that would substantially slow economic activity in much of the industrialized world, especially the U.S.; annihilate demand for jet fuel, motor gasoline, and (to a lesser degree) diesel; and spur the U.S. refinery sector to reduce their utilization rates to less than 70%,” RBN Energy said this month.

New pipelines, production curtailments, changed forecasts, and reduced capex by producers have “significantly altered crude oil and natural gas market fundamentals,” in the Permian, RBN Energy added.

The excess Permian pipeline capacity has helped raise the price of oil in Midland, Texas, to the levels of the WTI traded in Cushing, closing the double-digit dollar discount of Midland oil from early 2018 when crude takeaway capacity in the Permian was severely constrained. These days, producers who don’t have contracts to ship their crude at fixed prices could sell their Permian crude at prices similar to the U.S. benchmark. This could be some, but not enough, consolation for producers, considering that WTI Crude is struggling to hold onto the $40 a barrel handle these days. 

For refiners along the Gulf Coast, gone are the days of Permian oil significantly cheaper than WTI Crude. The more expensive Permian crude for processing only adds to refiners’ biggest distress these days—the crash in fuel demand.      

By Tsvetana Paraskova for Oilprice.com

https://oilprice.com/contributors/Tsvetana-Paraskova

Edited by Tom Nolan

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Why Natural Gas Prices Are Set To Soar

By Tsvetana Paraskova - Sep 25, 2020, 5:00 PM CDT

https://oilprice.com/Energy/Natural-Gas/Why-Natural-Gas-Prices-Are-Set-To-Soar.html

The highly volatile U.S. natural gas benchmark prices are set to trend higher in the coming months amid lower domestic production, higher demand in the winter, and recovering global gas prices in Europe and Asia—America’s key export destinations for liquefied natural gas (LNG).   The coming winter season and the end of the hurricane season that has disrupted LNG operations and exports along the U.S. Gulf Coast, coupled with recovering gas demand for industrial activities in Asia and Europe, are likely to send natural gas prices to above $3 per million British thermal units (MMBtu) in the winter months, the natural gas futures curve and EIA estimates show. 

This summer, Henry Hub benchmark prices have been extremely volatile, with domestic demand and storage numbers serving as key drivers in the absence of major incentives for LNG exports amid depressed demand and gas prices elsewhere due to the pandemic that hit industrial activities. 

The coming of the winter heating season, however, is about to change the fundamentals. Demand is expected to rise with the fall in temperatures in the northern hemisphere, supporting U.S. and global natural gas prices. Higher prices at the key European and Asian hubs will make LNG exports to those destinations viable and profitable again. 

This week’s rollercoaster ride of U.S. natural gas prices was indicative of a demand/supply picture in a so-called ‘shoulder season’ when power demand for air conditioning begins to wane, but demand for heating is not there yet. So prices reacted to the immediate drivers—storage, feed supply for LNG, and storm-induced shut-ins. 

After surging more than 15 percent to over $2/MMBtu on Wednesday, U.S. front-month natural gas futures jumped by another 5 percent by mid-day on Thursday, after the EIA reported a smaller-than-expected natural gas injection into storage.

This week, natural gas prices have seen some extreme volatility, from a 10-percent plunge on Monday to a 15-percent surge on Wednesday, also due to the rollover of the October futures contract expiring on September 28, with traders rolling out of the October contract to the November contract of higher prices. While the October contract settled at $2.227/MMBtu on Thursday, the November contract settled at $2.856/MMBtu, while the futures December through March are all trading at above $3.20/MMBtu, with the January futures at $3.44/MMBtu, data from CME Group shows.

Prices for the coming months above $3 are not surprising as winter is the peak demand season for gas in the U.S., Europe, and northern Asia. 

While demand is expected to be high, U.S. natural gas production is now much lower than last year due to the low production in the Permian, where low crude oil prices are reducing associated natural gas output from oil-directed rigs, the EIA said in its September Short-Term Energy Outlook (STEO). 

In addition, U.S. LNG suppliers will now have more incentive to export, with spot LNG prices Asia jumping to multi-month highs on increased demand and lower supply amid maintenance in Australia and shut-in terminals due to storms and hurricanes in the U.S. Gulf Coast. There may not be any cancelations of U.S. LNG cargoes for November, trade sources told Reuters, compared to peak cancelations of up to 45 cargoes in July. 

Spot natural gas prices at the Dutch TTF hub are also at multi-month highs at over $3/MMBtu, compared to a low of below $1/MMBtu in May, opening the window for profitable U.S. LNG exports to the region again. 

Having plunged by more than 50 percent between January and July, U.S. LNG exports are set to pick up the pace, and the increase already started in August. 

As per EIA estimates, U.S. LNG exports averaged 3.7 Bcf/d in August, up by 19 percent from July amid rising spot and forward natural gas prices in Europe and Asia.

“Higher global forward prices indicate improving netbacks for buyers of U.S. LNG in European and Asian markets for the upcoming fall and winter seasons amid expectations of natural gas demand recovery and potential LNG supply reduction because of maintenance at the Gorgon LNG plant in Australia,” the EIA said, expecting U.S. LNG exports to return to pre-COVID levels by November 2020 and to average more than 9 Bcf/d from December 2020 through February 2021.

The EIA expects that lower U.S. gas production, coupled with rising domestic demand and demand for LNG exports in the winter, will send Henry Hub spot prices jumping to a monthly average of $3.40/MMBtu in January 2021. Monthly average spot prices are set to remain above $3.00/MMBtu for all of next year, averaging $3.19/MMBtu in 2021, up from a forecast average of $2.16/MMBtu in 2020. 

By Tsvetana Paraskova for Oilprice.com

https://oilprice.com/contributors/Tsvetana-Paraskova

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Natural Gas Will Rule The US Energy Market For Decades

By Irina Slav - Sep 26, 2020, 6:00 PM CDT

https://oilprice.com/Energy/Natural-Gas/Natural-Gas-Will-Rule-The-US-Energy-Market-For-Decades.html

Natural gas was first hailed as the bridge between the fossil fuel past and the renewable future. Then it came under fire because although cleaner than oil and coal, it is not entirely emission-free. But according to a new report from Energy Market Advisors, it will rule the energy mix of the United States even 20 years from now. 

The reasons for this continued dominance are simple enough even if they may be unpleasant for the most hard-line supporters of renewables such as solar and wind. Gas is not only cheap, but its supply is also continuous, so, importantly, it does not need battery storage the way solar and wind do, which increases the total costs of such installations even if other costs are falling, which they are.

These falling costs will undoubtedly pave the way to much more solar- and wind-heavy energy mix across North America, while coal sinks into oblivion, partly driven by its worse economics, the report said. By 2044, close to half of the existing coal power generation capacity will be gone. At the same time, solar will grow from 60 GW this year to some 250 GW in 2044 – an impressive fourfold growth. Wind will grow, too, albeit more modestly, from 115 GW today to 191 GW in 2044. But gas will rule them all.

To date, natural gas accounts for some 41 percent of North American energy generation. In 2044, according to Energy Market Advisors, a division of Hitachi ABB, gas will account for 43 percent. This, compared with the explosive growth seen in solar and wind, does not seem particularly impressive. The thing to remember is, however, that even with this almost absent growth, gas will be the fuel driving the biggest portion of power generation in North America. And this means that the fossil fuel era is far from over, really.

In some parts of the United States, it will even continue to be the dominant energy source even in 2044, according to the EMA report. In the Midwest, for instance, natural gas will account for 49 percent of energy generation in that year, while renewables will account for 31 percent. In the Southeast, gas will come to account for 57 percent, while renewables rise from less than 10 percent to 20 percent.

The forecast dominance of gas is not something that some governors such as New York’s Andrew Cuomo would want to hear as they strive for 100-percent renewable energy. But there is another reason gas will be dominant: it will help make the grid resilient to the intermittency of renewable energy generated by solar and wind farms. Because it is not intermittent like them, gas can provide the essential baseload every grid needs to provide a reliable power supply to its users. And if the supply is not reliable, the green energy boom could easily lose public support.

 “We need to pay attention to the integrity of the electrical grid. Because if we do not, we are going to lose this whole green thing we’re doing. We’re going to lose the public,” a Long Beach state Assemblyman, Patrick O’Donnell, told the California water board this summer when a heatwave revealed the state’s weak spots in energy supply.

“Cheap natural gas prices and the energy source’s ability to fill in where sustainable energy falls short will speed investment growth,” the EMA report authors wrote. “As an energy source, gas is regarded as a ‘stop-gap’ solution for renewables.”

It may even become something more than a stop-gap solution if the projected strong growth in renewable capacity additions does not pan out. The expiry of the production tax credit and the phase-out of the investment tax credit could drive a slowdown in new solar and wind capacity additions, Shilpa Kokate, Advisory Director for Easter U.S. for Hitachi ABB Power Grids, told Oilprice.

There is also the issue of a carbon tax that will greatly help the shift to renewables from fossil fuels as will overall regulatory support for this shift, which has been essential for the advent of renewables everywhere. But there is also another thing, according to Kokate—failure to appreciate the role of natural gas in helping maintain the reliability of power supply. 

Opposition to fossil fuels is understandable. It could become problematic, however, if it is so complete that it overlooks the role natural gas, if not other fossil fuels, plays in energy security. Renewable energy is clean, certainly, but as the sun does not shine around the clock, and the wind does not blow constantly and at a constant speed, they need storage to provide a reliable power supply. Building enough energy storage to eliminate the need for natural gas completely is a challenging task: battery installations take up a lot of space, and they don’t cost a dollar a kW. Until these challenges are overcome, gas will continue to be needed.

By Irina Slav for Oilprice.com 

https://oilprice.com/contributors/Irina-Slav

 

 

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Natural Gas Price Fundamental Daily Forecast – Weaker as Traders Probe for Value Area after Steep Run-Up

Demand was expected to be light early this week, followed by strong early season cold shots across the eastern half of the U.S. at the mid-week.
1 hour ago (Sep 28, 2020 11:56 AM GMT)

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-weaker-as-traders-probe-for-value-area-after-steep-run-up-674871

Natural gas futures are trading slower shortly before the regular session opening on Monday. The move is a possible continuation of the selling pressure from Friday which was likely fueled by profit-taking, after prices soared earlier in the week, and end of the month position-squaring.

Also helping to support prices last week was improving liquefied natural gas (LNG) volumes and forecasts calling for a cold shot across the East Coast next week that could help jumpstart heating demand.

At 11:44 GMT, December natural gas futures are trading $3.236, down $0.041 or -1.25%.

US Energy Information Administration Weekly Storage Report

Last week’s EIA report covering the week-ending September 18 came in lighter than last week as expected and the price action indicates that traders thought it was bullish.

The EIA reported Thursday that domestic supplies of natural gas rose by 66 billion cubic feet (Bcf). That was smaller than the increase of 77 Bcf forecast by analysts polled by S&P Global Platts. Total stocks now stand at 3.680 trillion cubic feet (Tcf), up 504 Bcf from a year ago, and 407 Bcf above the five-year average, the government said.

There was a lot of interest in this report because traders wanted to know if the previously reported larger-than-normal print was a one-off anomaly or reflective of a looser market.

Last year, EIA recorded a 97 Bcf build for the period, and the five-year average is an injection of 80 Bcf.

Short-Term Weather Outlook

According to NatGasWeather for September 28 to October 1, “Showers continue across the Southeast as remnants of Beta drifts slowly eastward. Hot conditions persist over the Southwest into the Plains with highs of 90s to 100s, while cooling rains continue across the Northwest.

High pressure will rule much of the rest of the U.S. into early next week with comfortable highs of upper 60s to 80s. A major pattern change will occur mid-next week as a strong early season cool shot pushes into the Midwest and Northeast with highs of 40s to 60s, while hot over the West with highs of 80s to 100s. Overall, national demand will be low into the start of this week, then increasing to moderate to high.

Daily Forecast

There were no major weather developments over the weekend, but the short-term forecasts may have changed leading to the early setback.

Demand was expected to be light early this week, followed by strong early season cold shots across the eastern half of the U.S. at the mid-week. These could extend into early next week, leading to a surge in national demand. This gives us hope that the early selling pressure we are seeing will only be a short-term occurrence and that stronger buying will come in at more favorable price levels.

The recent spread activity suggests that traders believe that once the hurricane season eases and disruptions diminish, LNG could gain greater momentum as winter approaches and export demand from Asia and Europe normally increases.

For a look at all of today’s economic events, check out our economic calendar.

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(edited)

EIA

https://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm

spacer_transp.gif Contract spacer_transp.gif
 
spacer_transp.gif
 
09/15/20 09/16/20 09/17/20 09/18/20 09/21/20 09/22/20 View
History
  Spot Price
               
  Henry Hub
  2.19 2.06 1.65 1.56 1.33 1.49 1997-2020
  Futures Prices
               
  Contract 1
  2.362 2.267 2.042 2.048 1.835 1.834 1994-2020
  Contract 2
  2.741 2.664 2.577 2.633 2.710 2.597 1994-2020
  Contract 3
  3.158 3.120 3.097 3.154 3.186 3.134 1994-2020
  Contract 4
  3.282 3.249 3.229 3.285 3.317 3.264 1993-2020

 

 

EIA

Definitions, Sources and Explanatory Notes https://www.eia.gov/dnav/ng/TblDefs/ng_pri_fut_tbldef2.asp

 

Key Terms Definition
Contract 1 A futures contract specifying the earliest delivery date. Natural gas contracts expire three business days prior to the first calendar day of the delivery month. Thus, the delivery month for Contract 1 is the calendar month following the trade date.
Contract 2-4 Represent the successive delivery months following Contract 1.
Futures Price The price quoted for delivering a specified quantity of a commodity at a specified time and place in the future.
Natural Gas A gaseous mixture of hydrocarbon compounds, the primary one being methane.
NGL Composite Price The natural gas liquids (NGL) composite price is derived from daily Bloomberg spot price data for natural gas liquids at Mont Belvieu, Texas, weighted by gas processing plant production volumes of each product as reported on Form EIA-816, "Monthly Natural Gas Liquids Report."
Spot Price The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased "on the spot" at current market rates.
Edited by Tom Nolan

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For a glimpse of what the future of  natgas  may come to be, check out the world record sendout rate (regasification) of >1 Bcfd from a single FSRU (Excelerate's 'Experience') feeding the Guanabara terminal (Rio de Janeiro) last week.

This is in line with the massive (1,500 Mw) power plant at Sergipe that has come online this year which is also fueled by FSRU-supplied LNG.

Although Sergipe is the largest CCGP in Latin America, the 2 unit complex at Port Acu will double that at ~3,000 Mw with the first unit scheduled to come online in a few months.

Farther north and south, at Barcarena and Santa Catarina, more CCGPs are planned which will also be supplied by LNG via FSRUs.

 

On the other side of the globe in Indonesia, the huge (~1,800 Mw) Jawa 1 plant should startup next year. LNG will be the fuel, supplied -  once again -  via FSRU.

Indonesia can be an instructive case as the reciprocating engine plant in Bali  (Wartsilla supplied hardware. Multiple ~18 Mw generators arrayed in parallel) was one of the first mini power plants in the world.  This model is rapidly emerging in island nations like the Philippines, Indonesia, the Canary Islands, Jamaica, Puerto Rico, and other Caribbean and Central American countries.

Gas To Power is already underway, picking up momentum, with ripple effects yet to be fully appreciated.

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Gas now $2,75 ! Gazprom and Shell will make HUUUGE PROFITS in Q4. 

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1 hour ago, Dave Gilmour said:

Gas now $2,75 ! Gazprom and Shell will make HUUUGE PROFITS in Q4. 

GRAPH LIVE - https://tradingeconomics.com/commodity/natural-gas

I noticed that.  It closed in the U.S. on Monday at about $2.09.

Late last night (Monday 28th - Central time U.S.), like a bottle rocket Natural gas shot up over 33%.  My jaw dropped.

I won't kid myself and say this is based fully on fundamentals.  There is much more to it.  Once the momentum gets rolling, there is no stopping a juggernaut.  There are some big players involved with this kind of move.

It reminds me of Softbank (which gets propped up by the Japan Central Bank)....

Connecting The Dots: How SoftBank Made Billions Using The Biggest "Gamma Squeeze" In History

Profile picture for user Tyler Durden
Mon, 09/07/2020 - 09:55

https://www.zerohedge.com/markets/connecting-dots-how-softbank-made-billions-using-biggest-gamma-squeeze-history

and that is not a conspiracy as reported...

One Day After Zero Hedge, FT "Unmasks" SoftBank As Call-Buying "Nasdaq Whale"

Profile picture for user Tyler Durden
Sat, 09/05/2020 - 04:22

https://www.zerohedge.com/markets/one-day-after-zero-hedge-ft-unmasks-softbank-call-buying-nasdaq-whale

 

 

 

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Natural Gas Price Fundamental Daily Forecast – Dec Futures Contract Could Attract Buyers at $3.197 to $3.187

With the October futures contract off the board, the November futures contract is likely to inherit its bearish tone

James Hyerczyk

1 hour ago (Sep 29, 2020 11:36 AM GMT)

Natural gas futures are edging lower on Tuesday as a milder weather forecast and a mixed outlook for export demand of liquefied natural gas (LNG) continued to cap gains. Although the market is trading lower, it is above yesterday’s low suggesting the sell-off may have been related to the expiration of the October futures contract.

At 11:09 GMT, December natural gas futures are trading $3.229, down $0.042 or -1.28%.

As suspected, weather-driven demand expectations decreased over the weekend, driven by warmer changes to the pre-weekend forecast that would trim heating degree days (HDD) over the northern part of the country, according to Bespoke Weather Services.

“We do still have a healthy cool shot this week, relative to time of year, but while there are some HDDs in the north, we must also consider the total lack of demand in the South this week, as the cooler air” reduces cooling demand, Bespoke said.

Short-Term Weather Outlook

According to NatGasWeather for September 29 to October 5, “A cool front with showers will track into the east-central U.S. today with highs of 50s and 60s. Comfortable highs of 70s and 80s will rule the East Coast ahead of this system, then cooling into the 60s and 70s Wednesday. The West will be warm to hot with highs of 80s and 90s, locally 100s. California and Southwest. A stronger cold shot will push into the Great Lakes and East Thursday through Sunday with lows of 30s & 40s, locally 20s, for stronger demand. Overall, national demand will be moderate to low, then increasing to high late in the week.”

EBW Sees Shifts in Production and LNG Demand

“While Cameron has started to receive trace amounts of natural gas, both Cameron and Cove Point are still shut down, feed gas flows at Sabine Press have been reduced due to pipeline maintenance, and natural gas production has rebounded modestly,” the EBW analysts said. “By later this week, however, demand is likely to increase due to colder weather and increased LNG feed gas flows,” potentially pushing prices higher.”

Short-Term Forecast

With the October futures contract off the board, the November futures contract is likely to inherit its bearish tone.

“Once the smoke clears, with demand generally looking weak, and the risk of cash also staying weak with storage still at record levels,” the November contract “faces downside price risks as it becomes the new prompt month,” Bespoke said. “…Fundamentally, the picture for winter still looks bullish, however, but we will soon have to consider weather as well, which may not be very helpful to bulls over the next several weeks.”

Our work suggests the December contract may continue to probe potential support zones at $3.222 to $3.187 and $3.197 and $3.156. We think these areas represent value so we expect buyers to come in today or later in the week, especially with colder weather coming. The sweet spot on the charts is $3.197 to $3.187.

For a look at all of today’s economic events, check out our economic calendar.

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(edited)

Yesterday Monday September 28th by David Becker

Natural Gas Price Prediction – Prices Whipsaw After Testing Lower Levels

Hedge funds add to long and short position in futures and options

https://www.fxempire.com/forecasts/article/natural-gas-price-prediction-prices-whipsaw-after-testing-lower-levels-674965

Natural gas prices rebounded from session lows, after testing robust support levels. Colder than normal weather is expected to cover most of the mid-west and south-east over the next 6-10 days but the weather is expected to turn milder following that period. There are no tropical cyclones expected to form in the Gulf of Mexico or the Atlantic Ocean over the next 48-hours according to a report from NOAA. Hedge funds added to both long and short-positions evening the balance in open interest in futures and options

Technical Analysis

Natural gas prices rebounded after testing support near the 50-day moving average at 2.70. Initial resistance is seen near the late September highs at 2.93 and then the September highs at 3. Short-term momentum is flat as the fast stochastic continues to whipsaw between positive and negative territory, reflecting consolidation. Medium-term momentum is neutral as the MACD histogram prints near the zero index level with a flat trajectory that reflects consolidation.

ng-092820.jpg

Hedge Funds add to Long and Short-Positions

According to the latest commitment of trader’s report released for the date ending September 22, hedge funds added to both long and short positions in futures and options.

According to the CFTC, managed money added 17.6K contracts to long positions in futures and options while also adding 39.4K contracts to short-positions in futures and options.

Current open interest shows that long positions in futures and options outnumber short position in the managed money space by approximately 100K contracts.

 

Edited by Tom Nolan

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Permian Basin Tidbit

Houston American Energy Corp. (HUSA)

6.12   +5.03    (+460.54%)       As of 10:13AM EDT. Market open Tuesday Sept 29th

https://finance.yahoo.com/quote/HUSA?p=HUSA

 

https://www.marketwatch.com/press-release/top-penny-stocks-to-watch-today-5-energy-names-up-big-premarket-2020-09-29

Houston American Energy (HUSA Stock Report) is another one of the energy penny stock surging during Tuesday's premarket session. The company's recent focus was on its activities in the Permian Basin area of the U.S. Due to the coronavirus pandemic, the company had to pause operations.

Last month, Houston American restarted drilling in this area. Furthermore, earlier this month, in Hockley County, TX, the company announced that its total acreage block increased from 5,871 acres to 6,336 acres. Houston American Energy owns 20% of the block. The operator has informed Houston that drilling operations were planned to begin on September 18, 2020.

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Oil And Natural Gas Prices Slide As Traders Grow Cautious

By Tsvetana Paraskova - Sep 29, 2020, 10:00 AM CDT

https://oilprice.com/Energy/Oil-Prices/Oil-And-Natural-Gas-Prices-Slide-As-Traders-Grow-Cautious.html

Oil prices turned lower on Tuesday as growing COVID-19 cases rekindled fears of a stalled demand recovery while the markets and the world prepare to watch the first U.S. presidential debate later today.

As of 10:48 a.m. EDT on Tuesday, WTI Crude was down 2.68 percent at $39.51 and Brent Crude was trading down below $42, at $41.49, down 2.22 percent on the day.

Meanwhile, U.S. benchmark natural gas prices were down 7.37 percent at $2.589/MMBtu as the October futures contract rolled out, and the November contract became the front-month futures contract. Currently, overall U.S. natural gas demand is estimated at low to moderate by NatGasWeather.com, but demand is set to increase to high later this week with a stronger cold shot pushing into the Great Lakes and the East Thursday through Sunday with lows in the 30s and 40s, and in some places in the 20s. 

Oil prices fell on Tuesday, after hitting a week-high on Monday due to strong equity markets, a weaker U.S. dollar, and the proposal of House Democrats of a new stimulus package worth US$2.2 trillion.

On Tuesday, investors and speculators are waiting for the first Trump-Biden presidential debate, while resurging coronavirus cases in major European economies are dragging market sentiment down. The continued increase of Libya’s oil production at times of uncertain global demand recovery is also weighing on prices.

“Brent currently trades in a relative tight range with resistance being concentrated around $43.5/b where the 50 and 200-day moving averages meet. Downside support at $41.50/b (100-DMA) followed by $39.50/b,”

John Hardy, Head of FX Strategy at Saxo Bank, said on Tuesday.

The next immediate catalyst for oil prices will be the weekly inventory estimate of the American Petroleum Institute (API) on Tuesday. Expectations are centered around a crude oil inventory build of some 1 million barrels last week, according to ING.

By Tsvetana Paraskova for Oilprice.com

https://oilprice.com/contributors/Tsvetana-Paraskova

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On 9/20/2020 at 10:17 PM, A/Plague said:

technical analysis. I think the price will go down even below 50 (brent) .... after the price will hang + _ near zero .... what this will mean in real life of people I do not know.   and your neighbors will live at the expense of you and those like you ... in order not to lose customers and business, you will do and give everything for free in the hope that everything is about to return to normal and that negative prices are impossible in principle ... when I am in 2014 wrote that the price of oil would go below zero, they laughed at me and rolled their eyes ... now I laugh ...

One of you believes that the price will go up and the other believes that it'll go down.

Like me holding out one-dimensional and my stock dropped 6-1.  Really knew little about stocks. Short stocks, whatever! It's too late for me as the funds aren't there. I wished to learn and in Stock-House, I seen two persons like yourselves work together. Seemed so.

One guy thought that the stocks were following a drop trend then fight their way up a bit. So, when the stocks reached a specific low, they had a buy. The other guy followed the upwards trend closely, being so sure what they'd gain and likely drop a bit as the market was much like it is today. Uncertain. They had a sell price. Then, start over the next day, each with his own graphs or whatever.

It was interesting.

Did you experts ever hear about or experience like that?

 

 

 

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1 hour ago, Danny Hangartner said:

Did you experts ever hear about or experience like that?

My opinion with stocks and commodities on the exchanges...

It is a rigged game.  It's a Casino.  It's a "paper digit" trading scheme rigged by the Big Boys Club...and I ain't in the club.

Players who are out of my league manipulate the market.  There are many articles about the manipulation both in the mainstream news, but especially in the alternative media where Big Money doesn't have a hold on the script writing.  OILPRICE.COM has even had some articles in the past about the manipulation of the oil and gas markets.  One recent manipulation example is this Zero Hedge article about the Gold/Silver market.   https://www.zerohedge.com/markets/jpm-pays-1-billion-fine-settle-allegations-traders-rigged-precious-metals-treasury-markets

All that said, I do dabble with stocks.

I have over 700 shares of KOLD.  which went up over 20% today increasing over $6 per share (over $4,000).  But I could lose that tomorrow.

  • Upvote 1

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(edited)

4 minutes ago, Tom Nolan said:

All that said, I do dabble with stocks.

I have over 700 shares of KOLD.  which went up over 20% today increasing over $6 per share (over $4,000).  But I could lose that tomorrow.

Nice gain, but that's more a leveraged ETF than a traditional stock.

https://www.cnbc.com/quotes/?symbol=KOLD&tab=profile

 

Edited by Enthalpic

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QUOTE

"Emissions-cutting policies and Environmental, Social, and Governance (ESG) investing could extend to LNG..."

 

Could ESG Investing Disrupt The LNG Boom?

By Tsvetana Paraskova - Sep 29, 2020, 3:00 PM CDT

https://oilprice.com/Energy/Natural-Gas/Could-ESG-Investing-Disrupt-The-LNG-Boom.html

Global natural gas demand and within it, liquefied natural gas (LNG) demand, is set to grow in the long term, despite the setback in demand for all kinds of energy due to the coronavirus pandemic.

Coal-to-gas switching from North America to Europe and Asia, as well as increased use of natural gas in the industrial sector, will drive demand for LNG over the next two decades, analysts and the key players in the LNG market say.  

However, the expected growth in demand in LNG consumption through 2040 is not without risks, most of which have nothing to do with COVID-19 and its impact on the energy markets, Wood Mackenzie said in a recent analysis.

The ongoing drive toward clean technologies—much cleaner than natural gas—such as green hydrogen and carbon capture and storage utilization (CCSU), the increased weight of spot pricing on LNG trade, and the increased scrutiny of the carbon intensity of energy sources could drag LNG demand growth slowing down from current projections, WoodMac’s Massimo Di-Odoardo, Global Head of Gas Analysis, and Simon Flowers, Chairman and Chief Analyst, say.

COVID Hasn’t Wiped Out Long-Term LNG Demand  

Due to the pandemic, total global natural gas demand is expected to drop by 4 percent year over year in 2020, but return to growth as early as in 2021, the International Energy Agency (IEA) and the International Gas Union (IGU) say.

The cost-competitiveness of natural gas and the increased access to gas in developing countries are set to be the key drivers of higher gas demand in the medium term, especially for LNG, according to the Global Gas Report 2020 from August published by the IGU, research company BloombergNEF (BNEF), and Italian gas infrastructure firm Snam.

According to the IEA, the global LNG trade will jump to 585 bcm/y by 2025, up by 21 percent compared to 2019, thanks mostly to Asian consumers China and India, while the United States will account for almost all of the net growth on the export side.  

This year alone, despite the gloomy global gas demand outlook, China is set to raise its LNG imports by as much as 10 percent to new records, thanks to lower LNG prices and the faster-than-expected recovery in its industrial sector, analysts told Reuters last week.

Despite the pandemic, Wood Mackenzie is bullish on LNG long term, expecting global LNG demand to double over the next 20 years, thanks to Asian demand and gas-over-coal policy support.

Shell, the world’s biggest LNG trader, also sees global LNG demand doubling to 700 million tons by 2040, as natural gas plays a growing role in shaping a lower-carbon energy system, the supermajor said in its annual LNG outlook in February, just before the pandemic crippled oil and gas prices.

Even after the pandemic, Shell still “very much believe that with the current supply-demand outlook, this is a fundamentally strong sector that will grow at a rate that is close to 4% per year,” chief executive Ben van Beurden told Bloomberg in June.

But Long-Term LNG Demand Growth Faces Downside Risks

LNG demand growth will be there for years to come. Yet, environmental and carbon-related factors may clip some of that demand growth in the longer term, according to Wood Mackenzie.

“Longer term, intensifying interest from policymakers and investors in new technologies, including green hydrogen and CCUS, casts doubt on the sustainability of demand growth,” Di-Odoardo said.

The increased scrutiny of LNG projects’ carbon intensity could also be a growth-limiting factor.

“LNG’s track record on emissions isn’t good. Inert gases including CO2 must be removed before liquefaction and typically are vented into the atmosphere. Liquefaction itself is energy intense, usually fuelled by produced gas,” WoodMac noted.

In addition, spot pricing will play a growing role in LNG trade, thus increasing the exposure of new LNG project economics to spot pricing instead of traditional oil price-linked contracts, Di-Odoardo says. This means there could be higher volatility to the economic returns of future LNG projects.

Short-Term Supply Glut, Longer-Term Supply Crunch

Apart from China, the global natural gas markets will not flourish this year with decreased demand from the pandemic. Global LNG supply growth was already running ahead of demand growth even before COVID-19 crushed oil and gas prices and energy demand. Over the next few years, supply will be abundant to meet demand, after a record volume of 70 mmtpa of new LNG capacity was sanctioned in 2019.

This year, however, will likely not see a single major LNG project approved – for the first time in 20 years – as energy majors and smaller developers alike look to save cash and defer final investment decisions (FIDs) until this period of high uncertainty on the energy markets ends.

“We do not expect any major FIDs on LNG export projects this year,” Devin McDermott, Morgan Stanley’s lead commodity strategist for natural gas and power, told Reuters in early September.

By 2030, however, there will be a supply gap of 102 mmtpa, according to WoodMac, with low-cost Qatar already planning to fill nearly a third of that supply gap. The development of Qatar’s North Field East is expected on its own to absorb 32 mmtpa, “negating the need for new supply from other sources until the late 2020s and pushing out FIDs for projects elsewhere by two to three years,” the consultancy said.

There will be projects elsewhere vying to capture the expected LNG demand growth, but developers may have to consider many additional factors in their project economics on top of pricing. Emissions-cutting policies and Environmental, Social, and Governance (ESG) investing could extend to LNG, especially in developed economies, potentially limiting the expected doubling of LNG demand through 2040.  

By Tsvetana Paraskova for Oilprice.com

https://oilprice.com/contributors/Tsvetana-Paraskova

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18 minutes ago, Enthalpic said:

Nice gain, but that's more a leveraged ETF than a traditional stock.

What's your point?

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(edited)

18 minutes ago, Tom Nolan said:

What's your point?

It's not really a company you are investing in, it is a market instrument to trade commodities.

I do it too at times depending on swings with:

https://money.tmx.com/en/quote/HNU

https://money.tmx.com/en/quote/HND

It's not long-term investing requiring insight into a companies long-term viability, it's day trading based off volatility and graphic analysis.

Apples and oranges

 

Edited by Enthalpic

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By David Becker (Sep 29, 2020 5:21 PM GMT)

Natural Gas Price Prediction – Prices Tumble on Warm Weather Forecast

Demand rose in the latest week

https://www.fxempire.com/forecasts/article/natural-gas-price-prediction-prices-tumble-on-warm-weather-forecast-5-675277

Natural gas prices tumbled more than 8% on Tuesday as the weather forecast turns milder and traders looked for the exit. Demand increased in the latest week as colder weather buoyed consumption in both residential and commercial buildings. The weather is now expected to be warmer than normal throughout the west which should weigh on natural gas prices. There are no tropical cyclones expected to form in the Atlantic Ocean or Gulf of Mexico over the next 48-hours according to NOAA.

Technical Analysis

Natural gas prices moved lower on Tuesday dropping 8.5% but holding just above support near an upward sloping trend line that comes in near 2.53. A break of that level would see prices test 2.50 and then 2.25. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line. Short-term momentum has also turned negative as the fast stochastic also generated a crossover sell signal.

ng-092920.jpg

Demand Rose in the Latest Week

Demand rises, driven by use in buildings. Total U.S. consumption of natural gas rose by 1.0% compared with the previous report week, according to data from the EIA. Natural gas consumed in the residential and commercial sectors increased by 2.3 Bcf/d, or 27.9%, week over week amid cooler temperatures on the East Coast. Power generation declined by 6.7%. Industrial sector consumption increased by 2.3% week over week. Natural gas exports to Mexico increased 3.9%.

 

 

  • Upvote 1

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