Oct 5th - Natural Gas Prices surge in early trading

[Tom Nolan + 2,441]

Natural gas prices are surging in early trading.  Up over 9%

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

https://www.tradingview.com/symbols/NYMEX-NG1!/

https://www.tradingview.com/chart/?symbol=NYMEX%3ANG1!

 

Edited October 5, 2020 by Tom Nolan
missed a graph insert

[Tom Nolan + 2,441]

[Bob D + 562]

Weak cash prices will always pressure prompt NG futures prices.  But the prompt contract during the month of Oct is the Nov futures contract which is a winter month technically.  Can't sell off winter before it starts especially with production down 6Bcf/d versus last year in a capital constrained industry in a backwardated market.

Edited October 8, 2020 by Bob D

[Tom Nolan + 2,441]

Tighter Markets Cause Natural Gas Prices To Jump Almost 10%

By Julianne Geiger - Oct 05, 2020, 3:00 PM CDT

https://oilprice.com/Energy/Natural-Gas/Tighter-Markets-Cause-Natural-Gas-Prices-To-Jump-Almost-10.html

Natural gas prices on Monday rose nearly 10 percent as lofty hopes of an economic stimulus deal in the United States persist, an increase in LNG exports, and positive reports of President Donald Trump’s bout with the coronavirus reinvigorates the markets after traders were spooked last week.

At 1:50 p.m. EDT, natural gas spot prices were trading up $0.241 MMBtu (+9.89%) at $2.679.

While some reports suggested that colder temperatures in the MidWest were responsible for the surge in natural gas prices, NatGasWeather predicted that national demand for the fuel would be moderate on Monday and low the rest of the week due to very warm temperatures in the rest of the United States. So while demand is expected to perk up in the Great Lakes region, nationally, natural gas demand is determined to stay low for the remainder of the week.

According to the Energy Information Administration, natural gas inventories are still 405 billion cubic feet above the five-year average.

Output, however, is down, with production totaling 86.8 billion cubic feet per day for the first few days in October—down from an already four-month low in September of 87.2 billion cubic feet per day, according to Refinitiv data. Meanwhile, LNG exports have averaged 7.1 bcfd so far this month—an increase from the 5.7 bcfd that was exported last month—atypically low due to vessel disruptions in stormy Gulf ports.

Traders are now also banking on the fact that production may fall even further this week, as yet another hurricane is barreling towards the Gulf of Mexico—this time, it is Tropical Storm Delta that the market needs to keep its eye on. Delta is expected to hit between Lousiana and Florida sometime on Friday.

By Julianne Geiger for Oilprice.com

[Tom Nolan + 2,441]

Natural Gas Price Prediction – Prices Fall Despite Upgrade of Hurricane Delta

Warm weather erodes prices

David Becker

5 hours ago (Oct 06, 2020 6:58 PM GMT)

https://www.fxempire.com/forecasts/article/natural-gas-price-prediction-prices-fall-despite-upgrade-of-hurricane-delta-676594

Natural Gas prices whipsawed on Tuesday declining 3.8%, after rallying more than 7% on Monday. Hurricane Delta was upgraded to a category 4 storm as it moved into the Gulf of Mexico. The strength of the storm will likely knock out between 25-50% of the US Gulf natural gas production. The decline in prices comes as the weather in the US is expected to be warmer than normal over the next two weeks reducing heating demand.

Technical Analysis

Natural gas prices whipsawed closing on the lows of the trading session. Resistance is seen near the 10-day moving average at 2.65. Support is seen near the October lows at 2.37. The 10-day moving average recently crossed below the 50-day moving average which means a medium-term downtrend is now in place. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices for natural gas.

Supply Rises

Supply rises according to the EIA. The average total supply of natural gas rose by 0.6% compared with the previous report week. Dry natural gas production grew by 0.3% compared with the previous report week. Average net imports from Canada increased by 7.5% from last week.

 

[Tom Nolan + 2,441]

Monday - Gas prices surge

Tuesday - Gas prices fall far

Wednesday - Before the "Open", gas prices surge

Natural Gas Price Fundamental Daily Forecast – Hurricane Delta Not Expected to Directly Hit LNG Facilities

Today’s early price action suggests investors should be prepared for two-sided trading until the path of Hurricane Delta is clarified.

James Hyerczyk

15 minutes ago (Oct 07, 2020 1:02 PM GMT)

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-hurricane-delta-not-expected-to-directly-hit-lng-facilities-676697

 

Natural gas futures are trading higher on Wednesday shortly after the cash market opening as traders continue to assess the possible impact of Hurricane Delta on production. On Tuesday, prices took a hit after the threat of the hurricane striking Gulf Coast facilities later this week increased significantly.

According to Natural Gas Intelligence (NGI), “Like Hurricane Laura in August, Hurricane Delta is poised to quickly sap the momentum building in liquefied natural gas (LNG) demand. The Category 4 storm is expected to make landfall in Louisiana early Saturday, less than two months after Laura devastated Lake Charles, LA.”

At 12:37 GMT, December natural gas is trading $3.165, up $0.069 or +2.23%.

Short-Term Weather Outlook

According to NatGasWeather for October 7 to October 13, “The northern US will be mostly comfortable today with highs of upper 60s and 70s, then cooling across the Great Lakes and Northeast Thursday – Saturday as a weather system sweeps through with highs of 50s and 60s, lows of 30s and 40s.

The rest of the US will be warm to very warm with highs of 70s and 80s besides the hotter Southwest into California with 90s to 100s. Most of the US will be comfortable this weekend and early next week besides the Northwest and Northern Plains as weather systems bring showers and cooling. Overall, national demand will be low.”

Daily Forecast

Today’s early price action suggests investors should be prepared for two-sided trading until the path of Hurricane Delta is clarified.

We’re expecting some loss of LNG demand because facilities are being evacuated in the Gulf of Mexico as a precaution. These operators don’t wait. When a tropical storm enters the Gulf of Mexico, they begin shutting down. However, the path of the hurricane then become most important.

Several weeks ago Hurricane Laura directly hit natural gas facilities, prompting an extended shutdown do to extensive repairs. The lower demand created by this event drove down natural gas prices.

This time, the path of Hurricane Delta is expected to miss the facilities so there would be no need for an extended shutdown or extensive repairs.

Bespoke Weather Services suspects some LNG volumes would drop off in light of the storm, however, at this time, it does not expect a direct hit on any of the facilities, “as it is typically more difficult by this time of the year to get a major hurricane hit in the western Gulf.”

Basically, we expect to see lower prices if natural gas facilities take a direct hit, but higher prices if the hurricanes misses and LNG demand remains solid.

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

[Rob Kramer + 696]

Hey tkm heres a great site . Celcius energy.  

https://www.celsiusenergy.net/p/production.html?m=1

https://www.celsiusenergy.net/p/natural-gas-supply-demand.html?m=1

He also has power burn and EOS .

[Tom Nolan + 2,441]

Natural Gas Price Prediction – Prices Rebound Ahead of Inventory Report

Inventories are expected to rise by 76 Bcf

David Becker

7 hours ago (Oct 07, 2020 5:59 PM GMT)

https://www.fxempire.com/forecasts/article/natural-gas-price-prediction-prices-rebound-ahead-of-inventory-report-4-676801

 

Natural gas prices rebounded on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 76 BCF build according to survey provider Estimize. The weather is expected to remain mild, moving from warmer than normal throughout the country over the next 6-10 days, to mild on the coasts and normal in the mid-section during the next 8-14 days. Hurricane Delta is headed for the Gulf of Mexico where it is expected to make landfall as a category 3 or 4 storms, in Louisiana on Friday. Approximately 20% of the US natural gas has now been shut in due to the storm. LNG exports rose in the latest week, slightly increasing demand.

 

Technical Analysis

Natural gas prices whipsawed closing higher on Wednesday rising 3.3%, making a lower high and a lower low, which is generally the sign of a downtrend. Resistance is seen near the 10-day moving average at 2.63. Support is seen near the October lows at 2.37. The 10-day moving average recently crossed below the 50-day moving average, which means that a medium-term downtrend is now in place. Momentum is neutral to positive. The RSI (relative strength index) is moving higher bounding from oversold levels. The MACD (moving average convergence divergence) histogram is printing in negative territory with a rising trajectory that points to consolidation.

LNG Exports Rose Week over Week

US LNG exports rose week over week. Fourteen LNG vessels with a combined LNG-carrying capacity of 50 Bcf departed the United States between September 24 and September 30, according to shipping data provided by the Energy Information Administration.

[Tom Nolan + 2,441]

THURSDAY MORNING - October 8th

Natural Gas Price Fundamental Daily Forecast – Traders Looking for 73 Bcf Build in EIA Report

Due to storage issues, the next five storage reports are likely to be eyed closely by traders as they compare the actual numbers to the EIA estimates.

James Hyerczyk

46 minutes ago (Oct 08, 2020 12:32 PM GMT)

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-traders-looking-for-73-bcf-build-in-eia-report-676953

Natural gas futures are trading slightly lower on Thursday shortly before the release of the U.S. government weekly storage report. The price action reflects general concern over the report, but mostly reflects a slight concern over Hurricane Delta, which is not expected to directly hit any production facilities and may even weaken before it makes landfall. Also weighing on prices were a weaker spot market. Nonetheless, volatility is likely to continue because each event does carry a little uncertainty.

At 12:06 GMT, December natural gas is trading $3.097, down 0.052 or -1.65%.

Meanwhile, lower demand because of the coronavirus pandemic and the usual shoulder season lull in power burns have led to a much quicker-than-normal refilling of Lower 48 storage, leading to concerns over containment issues.

Total stocks at the end of September stood at more than 3.8 trillion cubic feet (Tcf), which is 12% above the five-year average, according to the Energy Information Administration (EIA). In its latest Short-Term Energy Outlook released Tuesday, the EIA said it expects inventories to swell beyond 4 Tcf by the end of October.

Short-Term Weather Outlook

There are some minor changes to the 15-day forecast, but overall the coming pattern is expected to remain rather bearish, Natural Gas Intelligence (NGI) reported.

Mobius Risk Group said recent weekly changes in wind generation being driven by transitory weather patterns are also worth noting on the weather front.

According to NatGasWeather for October 7 to October 13, “The northern US will be mostly comfortable today with highs of upper 60s and 70s, then cooling across the Great Lakes and Northeast Thursday – Saturday as a weather system sweeps through with highs of 50s and 60s, lows of 30s and 40s. The rest of the US will be warm to very warm with highs of 70s and 80s besides the hotter Southwest into California with 90s to 100s. Most of the US will be comfortable this weekend and early next week besides the Northwest and Northern Plains as weather systems bring showers and cooling. Overall, national demand will be low.”

US Energy Information Administration Weekly Storage Report

NGI reports ahead of the EIA storage report, to be released at 14:30 GMT, analyst estimates hovered around a build in the low to mid-70s Bcf. The seven analysts surveyed by Bloomberg responded with estimates ranging from 67 Bcf to 85 Bcf, with a median of 73 Bcf. A Wall Street Journal poll had the same range but arrived at a median of 74 Bcf. A Reuters poll with the same range of projections had a median of 73 Bcf. NGI pegged the build at 75 Bcf.

Daily Forecast

Due to storage issues, the next five storage reports are likely to be eyed closely by traders as they compare the actual numbers to the EIA estimates.

If the actual EIA number comes in at low-to mid- 70, it would be far below the year-ago and five-year averages reported by the EIA. For the same week last year, the EIA recorded a 102 Bcf injection, while the average over the past five years is 86 Bcf.

With the U.S. stocks well above historical levels, a below average EIA report could provide some support for prices, but a high number could lead to a steep sell-off.

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

 

[0R0 + 6,251]

On 10/5/2020 at 6:51 PM, Tom Nolan said:

While some reports suggested that colder temperatures in the MidWest were responsible for the surge in natural gas prices, NatGasWeather predicted that national demand for the fuel would be moderate on Monday and low the rest of the week due to very warm temperatures in the rest of the United States. So while demand is expected to perk up in the Great Lakes region, nationally, natural gas demand is determined to stay low for the remainder of the week.

Don't think that was the issue.

It was Chicago PMI (ISM) and Markit reports.

https://s3.amazonaws.com/images.chaptermanager.com/chapters/b742ccc3-ff70-8eca-4cf5-ab93a6c8ab97/files/mni-chicago-press-release-2020-09.pdf

https://www.markiteconomics.com/Public/Home/PressRelease/12560bb861234dc1b58b3dacc48210fa

 

The rate of new business growth accelerated in September, as the respective seasonally adjusted index moved further away from April's nadir. The strong expansion was the sharpest since March 2019, as total new sales were boosted by strengthening customer demand. The upturn was aided by a fourth successive monthly rise in new export orders. Moreover, the expansion in foreign client demand was the second-strongest since data collection for the series began six years ago.

 

In line with greater new business inflows, firms increased their workforce numbers in September. The rate of job creation was strong overall and the second-quickest since February 2019, as many firms stated that insufficient capacity to process new orders had driven hiring.

At the same time, backlogs of work rose for the third month running and at a solid pace.

 

Business activity rises further amid stronger expansion in new sales Employment growth remains historically elevated Selling prices increase at sharpest pace for two years Data were collected 11-25 September 2020. Including IHS Markit U.S. Composite PMI™

This is what is driving both oil and gas despite the question of stimulus' likely fail. And expected contested election and chaos.

The EU CV19 breakouts are bringing Trump's standing on the CV19 handling into better perspective for him. If all that hard lockdowns and heavy restrictions do is delay the spread then there was no point to it once hospitals were no longer burdened. Which they were not outside of NYC metro and specific towns.

The Dakotas outbreak is showing no different a pattern than FL or AZ. Indicating that what little those stated and their localities did was either too late or ineffective. Thus lowering substantially odds that anyone other than Blue cities will have lockdowns this winter. Thus allowing continued resumption of industrial activity and capacity expansion.

Also, bad news from Mexico on their outbreaks and containment efforts sabotaging production is bringing orders into US facilities that normally see little activity. Thus increasing gas/electric demand.

Mexico slump

https://www.markiteconomics.com/Public/Home/PressRelease/8dd5759fc7de47ddb7c6573159689928

 

 

 

[0R0 + 6,251]

17 hours ago, Tom Nolan said:

LNG Exports Rose Week over Week

US LNG exports rose week over week. Fourteen LNG vessels with a combined LNG-carrying capacity of 50 Bcf departed the United States between September 24 and September 30, according to shipping data provided by the Energy Information Administration.

Spotter and pilot reports that loading facilities had been 3 ships deep 1st week of Oct. Not just for LNG, but petrochems and refined product along the Southern ports.. "Never been this busy". Will have to wait and see whether this continues after the Huricane.

[Rob Kramer + 696]

1 minute ago, 0R0 said:

Spotter and pilot reports that loading facilities had been 3 ships deep 1st week of Oct. Not just for LNG, but petrochems and refined product along the Southern ports.. "Never been this busy". Will have to wait and see whether this continues after the Huricane.

https://mobile.twitter.com/Ronh999/status/1314202561658880001

Mostly Nat Gas info but has recently been expanding into economy. 

This (post) is a out Cameron LNG being available after the hurricane clears. 

[Bob D + 562]

If you are bullish NG, what is the preferred investment to profit.

UNG??  I don't like the correlation.

Energy Stocks??   Marcellus E&P stocks are beaten down.

Futures contracts??   Easy to get stopped out and expensive margin?

Where do you put your money?

[0R0 + 6,251]

1 hour ago, Bob D said:

If you are bullish NG, what is the preferred investment to profit.

UNG??  I don't like the correlation.

Energy Stocks??   Marcellus E&P stocks are beaten down.

Futures contracts??   Easy to get stopped out and expensive margin?

Where do you put your money?

Gold royalty and other gold related and swap among index funds for general market participation as trade. Looking to rebalance to long term Energy cos. As soon as merger wave clears. Not all of them are over-leveraged and many are picking up wells and prospective fields for bubkes.

[Gerry Maddoux + 3,627]

Well, I don't like to invest based on politics, but if you believe the pundits and pollsters, we're going to have the first president to be 80 during his term, to have had two brain surgeries, who acts cognitively challenged even before taking office, with an exceptionally liberal female running mate with enough aspiration and toughness to trigger Article 25, Section IV, and then see it through. 

In that case, while the "new president" has recently walked back from it, he previously vowed to declare a moratorium on fracking on federal land, which would pretty well knock out the Delaware sub-basin and quite a bit of the Texas Permian. If he backs up and decides not to do that (smart on his part), there's still a Democrat-run EPA that will almost certainly hold the TRRC feet to the fire on Statewide Rule 32 (after 24 hours of venting or 10 days of flaring you've got to hook onto a pipeline or shut it down). 

That's going to take a large # of marginal operators off the radarscope. Despite two new Permian takeaway pipelines going in, there are still going to be reservations made and that means money up front, which a lot of them simply don't have. 

So, while everyone has cooked into the formula cheap NG and LNG for the foreseeable future (which, loosely translated, means enough time to allow the renewables group to get their act together), that might not the case, as shutting down 25% of the operators would mean that the huge amount of overhang NG from the Permian would be decreased. 

That would mean that the pure dry gas operators might do awfully well. Coffeeguyz told us earlier that the Appalachian Basin operators are routinely hitting 5B cubic feet the first year (and sometimes 10), which means $10M gross for a well that cost $6M to drill (or $20M if you get lucky). You're right: those App Basin operators have been beaten up.

It's probably worth a thought.  

[Tom Nolan + 2,441]

2 hours ago, 0R0 said:

This is what is driving both oil and gas despite the question of stimulus' likely fail.

Excellent points!

[Tom Nolan + 2,441]

51 minutes ago, 0R0 said:

Gold royalty and other gold related and swap among index funds for general market participation as trade.

Right now is a great buying opportunity with gold and silver mines ...and their Royalty & Streaming Companies.  There are some great prices on many of these stocks.

[Wombat + 1,028]

Just thought you guys might be interested in this:

https://themarketear.com/posts/cojk3Neuoa

[Tom Nolan + 2,441]

39 minutes ago, Wombat said:

Just thought you guys might be interested in this:

https://themarketear.com/posts/cojk3Neuoa

Thanks Wombat.  I like that scroll !  You can quickly grasp trends visually. 

I thought this was interesting...

 

Next week, with the Chinese Holidays over, I wonder how it will affect markets.

[Tom Nolan + 2,441]

FRIDAY - 9 Oct

Natural Gas Price Fundamental Daily Forecast – Next Major Move Determined by LNG Demand

James Hyerczyk

2 hours ago (Oct 09, 2020 10:19 AM GMT)

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-next-major-move-determined-by-lng-demand-677143

Natural gas futures are inching higher on Friday on increasing bets that the impact of Hurricane Delta will be minimal on liquefied natural gas production in the region. Traders are monitoring the situation closely because a direct hit on a facility could put it out of commission for some time. This would cut into LNG demand, which is needed to prevent storage issues before the winter demand season.

At 09:58 GMT, December natural gas futures are trading $3.164, up $0.015 or +0.48%.

US Energy Information Administration Weekly Storage Report

The U.S. EIA reported Thursday that domestic supplies of natural gas rose by 75 billion cubic feet for the week-ended October 2. On average, analysts polled by S&P Global Platts forecast an increase of 71 billion cubic feet. Total stocks now stand at 3.831 trillion cubic feet, up 444 billion cubic feet from a year ago, and 394 billion cubic feet above the five-year average, the government said.

NGI reported ahead of the EIA storage report that analyst estimates hovered around a build in the low to mid-70s Bcf. The seven analysts surveyed by Bloomberg responded with estimates ranging from 67 Bcf to 85 Bcf, with a median of 73 Bcf. A Wall Street Journal poll had the same range but arrived at a median of 74 Bcf. A Reuters poll with the same range of projections had a median of 73 Bcf. NGI pegged the build at 75 Bcf.

Short-Term Weather Outlook

According to NatGasWeather for October 9 to October 15, “A glancing cool shot will bring highs of 50s and 60s to the Upper Great Lakes and New England the next few days. Heavy rain and strong winds will arrive along the Gulf Coast today as Hurricane Delta makes landfall into Louisiana, then tracks northward. Mild rains will push into the Northwest this weekend, then into the Midwest next week where it will tap chilly Canadian air for lows of 20s and 30s. The rest of the US will be warm with highs of 70s and 80s besides hotter 90s Southwest. Overall, national demand will be low.”

Daily Forecast

The EIA report was bearish, but traders are focusing on Hurricane Delta and its possible impact on LNG demand.

A direct hit of an LNG facility that causes damage could exert a bearish influence on prices because it will curtail production and shipping.

If Hurricane Delta misses and there is no damage to facilities or any delays in shipping then prices could rise because of expectations of higher demand.

At this time, it’s going to take a combination of strong LNG demand and heating demand to prevent storage problems in about a month.

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

[Tom Nolan + 2,441]

I often contemplate for any sector:  "who wants higher prices" and "who wants lower prices".  

With the Chinese Holidays ending, I wonder what next week will bring to this market.

[Dan Warnick + 6,100]

5 hours ago, Tom Nolan said:

Thanks Wombat.  I like that scroll !  You can quickly grasp trends visually. 

I thought this was interesting...

 

Next week, with the Chinese Holidays over, I wonder how it will affect markets.

I fail to see the Chinese National Day holiday as being some kind of big deal, one way or the other.  The holiday lasted Friday and Saturday.  What's the big deal?

[Bob D + 562]

21 hours ago, Gerry Maddoux said:

Well, I don't like to invest based on politics

The politics of energy prices is simple in mind

Under Trump energy prices are stagnated.  Why??  Trump cares about the economy not oil and gas prices.

Under Biden energy prices will sky rocket.  Why??   Biden cares about renewables.  It's way too early in the transition to renewables to forsake traditional oil and gas.  But he will.  Domestic declines continue.  Reliance on imports is required to fill the S&D gap.  Prices go up ... period.

Biden is better for oil and gas prices.  Worse for the economy.  It's a shitty trade off I don't want to see but if Biden wins ...I win.  Personally I'd rather lose and have America win.