?Short Squeeze in Natural Gas? $3.40 could see shorts unloading massively- FXEmpire Christopher Lewis

[Tom Nolan + 2,441]

Natural Gas Price Forecast – Natural Gas Testing Major Resistance Barrier

https://www.fxempire.com/forecasts/article/natural-gas-price-forecast-natural-gas-testing-major-resistance-barrier-745507

June 23, 2021 by Christopher Lewis

Natural gas markets have rallied again during the course of the trading session here on Wednesday, testing the $3.40 level which is a major area to pay attention to.

Natural gas is one of the most heavily shorted positions on Wall Street right now, which makes the $3.40 level very important as it could kick off a “short squeeze.” At this point in time, it appears that a lot of natural gas momentum is simply a bit of a “knock on effect” from the commodity boom in general, but the most important thing to remember here is that “price is truth.” Never mind the fact that the United States has enough natural gas in the ground to power the rest of the world for 300 years, and the Canada has more, the reality is price is going higher, so the move does not necessarily need to make sense at this point.

The question now remains whether or not we can get a daily close above the $3.40 level? Right now, it certainly looks as if we are going to try to do so. If we do, that could kick off a bit of a short squeeze play, much like we have seen by the gang at Wall Street Bets, and some of their favorite meme stocks. That being said, there actually is some demand for natural gas, so it makes a little bit more sense than that move but at the end of the day price is going higher. As far as shorting is concerned, I need to see that hammer taken out from the Monday session to the downside in order to do so, which typically would be the play this time a year as demand typically falls off a cliff.

2 minute chart video - https://youtu.be/wciGNUO793I

 

[Tom Nolan + 2,441]

U.S. Natural Gas Prices Jump To 29-Month High On Extreme Weather

By Tsvetana Paraskova - Jun 28, 2021, 10:00 AM CDT

https://oilprice.com/Energy/Gas-Prices/US-Natural-Gas-Prices-Jump-To-29-Month-High-On-Extreme-Weather.html

U.S. natural gas prices jumped last week and early on Monday amid a tight natural gas market and expectations of high demand for electricity in hotter than usual weather in many parts of the United States.

As of 8:19 a.m. EDT on Monday, the U.S. benchmark natural gas price at the Henry Hub was trading at above $3.50 per million British thermal units (MMBtu)—at $3.549, up by 1.52 percent. This was the highest price for the prompt futures in 29 months.  

On Thursday last week, the Energy Information Administration (EIA) reported net injections into storage of 55 billion cubic feet (Bcf) for the week ending June 18, lower than analysts had expected. The median estimate was 62 Bcf injection into storage of natural gas stocks. The lower-than-expected stockpiles of natural gas signaled a tighter market just as the Pacific Northwest is scorching in a heatwave and high temperatures are expected to continue into July in many parts of the U.S.  

While power demand is surging in the heat waves, working natural gas stocks totaled 2,482 Bcf in the United States as of June 18, which is 17 percent lower than the year-ago level and 6 percent lower than the five-year average for this week, the EIA said on Thursday.

During the same week last year, net injections into gas storage were more than double – 115 Bcf – the injection for the week to June 18. The average rate of injections into storage is 15 percent lower than the five-year average so far in the refill season, April through October, the EIA has estimated.

Amid this tight market, demand is expected to stay high at least until July 1, according to NatGasWeather.com. Very hot weather in the Pacific Northwest and hot high pressure in the West into Texas sent temperatures in the high 90s to the 110s in the weekend, including all-time record-breaking heat in Seattle and Portland.

By Tsvetana Paraskova for Oilprice.com

 

[Tom Nolan + 2,441]

I have mentioned this many times.  We are in a GRAND SOLAR MINIMUM  until about 2050.   With this, we will see increased volatility in seasonal patterns, along with other phenomena.

You can see an IMAGE which well describes the phenomena and also a video at the link...

https://community.oilprice.com/topic/21940-united-states-lng-exports-reach-third-place/page/7/#comment-147543

 

[Tom Nolan + 2,441]

Tuesday, June 29th we saw a 10% move over Monday's prices before it dropped back down to about $3.66 or so.

I sold my 1,100 shares of  BOIL at the apex.    We'll see how it rocks during this heat wave.

[Tom Nolan + 2,441]

Can The U.S. LNG Boom Compete On A Global Scale?

By Tsvetana Paraskova - Jun 29, 2021, 6:00 PM CDT

https://oilprice.com/Energy/Energy-General/Can-The-US-LNG-Boom-Compete-On-A-Global-Scale.html

The global liquefied natural gas market has recovered from the 2020 pandemic shock to energy demand. As LNG consumption and spot prices surge this year, U.S. exports of LNG are booming.   In the short term, American LNG exports are set for records this year, benefiting from the highest summer spot prices in Asia in at least six years and Europe’s very low natural gas inventories. Those have prompted Europe to restock with natural gas following a harsh winter that drained inventories when a cold snap in April caused unusual additional withdrawals from storage.

Currently, market fundamentals point to strong U.S. LNG exports in the short term as American supply is attractive for buyers. But how attractive is American LNG in the medium and long term?

According to the Baker Institute Center for Energy Studies (CES), U.S. LNG supply will continue to be a key player on the global market in the future, thanks to three main aspects: non-oil linked pricing, geopolitical motives of energy security for buyers, especially in parts of Europe, and the desire of other buyers, especially in Asia, to switch from coal-fired power generation to cleaner-burning natural gas.

“The need for diverse supplies to counter energy security risk and the desire to use cleaner-burning natural gas may well sustain U.S. LNG exports to otherwise price-sensitive customers,” Michelle Michot Foss and Anna Mikulska at the Rice University’s Baker Institute argue in a Forbes article.

“Molecules of U.S. Freedom”

U.S. LNG is attractive in central and eastern European countries willing to reduce their reliance on Russian pipeline gas and Russia’s gas monopoly Gazprom. These include Poland and the Baltic states, which have been eager to shake off Russian energy influence and continue to be strongly opposed to the Gazprom-led Nord Stream 2 pipeline project from Russia to Germany bypassing Ukraine.

The previous U.S. Administration even pitched LNG exports as “molecules of U.S. freedom to be exported to the world,” when it approved two years ago new projects to add additional American liquefaction and export capacity.

Non-Oil Linked Pricing

U.S. LNG suppliers have also revolutionized the pricing and term contracts by linking the price to the U.S. natural gas benchmark Henry Hub instead of to oil and allowing more flexibility in destinations and periods of term contracts. American LNG also benefited from the increasingly competitive spot market for LNG.

The oil price rally of recent months has raised global LNG prices linked to crude prices and made U.S. gas benchmark-linked supply more attractive.

While flexible terms and pricing alternatives to oil-linked contracts are points for U.S. LNG supply, the fact remains that in terms of costs, American exports struggle to compete with Qatar, and not all planned projects in the United States are sure to proceed to final investment decisions (FIDs) in the coming years.  

Qatar’s decision to develop the world’s largest project in terms of capacity is a major challenge to the other key LNG exporters, including America, to reduce their costs.

“At a long-term breakeven price of just over $4 per million British thermal units, it’s right at the bottom of the global LNG cost curve, alongside Arctic Russian projects,” Wood Mackenzie research director Giles Farrer said when Qatar announced its massive LNG expansion project earlier this year.

“Qatar is pursuing market share. This FID is likely to put pressure on other pre-FID LNG suppliers, who may find Qatar has secured a foothold in new markets,” Farrer added.

Despite the higher costs and prices of U.S. LNG, for some buyers, especially in central Europe, paying more for American supply is a smaller price to pay than continuing to depend on Russia for most of their gas.  

“The Achilles Heel” Of U.S. LNG Supply

Prices and geopolitics aside, a third – increasingly important – factor will be shaping the attractiveness of American LNG supply going forward. Major developed economies are in a race to pledge net-zero emission targets, while investors and backers of fossil fuel projects demand solid emission-reduction goals and profiles of new supply. This is where “the Achilles heel” of U.S. LNG exports lies, according to Wood Mackenzie.

American supply may be attractive in terms of non-oil-linked pricing or flexibility in contracts, but its carbon footprint could be a deterrent to customers, especially in Western Europe, which is increasingly looking at the emission profile of the energy it imports.

In the United States, developers have started to bet on showing a lower environmental impact as they compete with Qatar and Australia for global LNG export leadership. 

“To win customers, LNG developers are having to do more to prove their projects’ green credentials,” says Alex Munton, Wood Mackenzie’s principal analyst for LNG in the Americas.

Lower 48 upstream gas production needs to lower emissions to win over buyers in the energy transition, WoodMac notes.

“It’ll take years of tighter control – regulation or industry-led – before US upstream gas competes on carbon intensity with global basins,” Giles Farrer, Director of LNG, said.

The benefits of LNG over coal in Asia is a point for U.S. exports, but Western Europe’s snub of American supply because of emissions concerns is likely to change the way U.S. LNG developers plan and design their export capacity to remain competitive not only in terms of costs but also in ‘green’ credentials.   

By Tsvetana Paraskova for Oilprice.com