"Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/LNG-Tankers-Are-Queuing-Up-To-Unload-In-Europe.html

LNG Tankers Are Queuing Up To Unload In Europe

By Irina Slav - Oct 18, 2022, 2:10 AM CDT

Spain has declared an “exceptional operational situation” as several dozen LNG tankers queue for its regasification terminals, significantly exceeding available slots.

This week, Spain has made only six unloading slots available Reuters reported, citing unnamed sources, but there are more than 35 LNG carriers idling off its coast. The country has six LNG import and regasification terminals and is the biggest LNG importer in the EU.

The tanker pileup highlights Europe’s problem with LNG import capacity that prompted Germany to urgently strike a deal for the construction of two floating facilities so it can receive LNG directly.

Meanwhile, there is more LNG floating off the European coast, Reuters reported, citing more sources, suggesting the 35-strong tanker crowd off Spain is only part of the actual pile-up.

"Floating storage levels in LNG shipping is at all time high levels with slightly more than 2.5 million tonnes tied up in floating storage," Flex LNG Management chief executive Oystein Kalleklev told Reuters.

An LNG analyst from ICIS confirmed to Reuters there were a lot of LNG carriers idling off the Spanish and UK coast and circling the Mediterranean. And while they do that, the gas they carry cannot be used or put into storage.

According to ICIS’ Alex Froley, however, insufficient regasification capacity is not the only reason for the pile-up: prices for later deliveries of LNG in Europe are some $2 per mmBtu higher than current prices, which may have motivated some traders to keep their cargo on the water until late November or early December.

Meanwhile, U.S. LNG exports to Europe continue to be strong, despite the outage at Freeport LNG. In September, U.S. LNG producers shipped 87 cargoes of liquefied gas abroad, with the total at 6.25 million tons, Reuters reported earlier this month citing tanker tracking data. Of this, 70 percent went to Europe, the data showed.

By Irina Slav for Oilprice.com

More Top Reads from Oilprice.com:

• OPEC+ Oil Output Hits Highest Level Since April 2020 But Remains Below Target
• Sweden Boots Russia From Nord Stream Investigation
• Railway Strike Looms After Union Rejects Biden-Backed Labor Deal

[Tom Nolan + 2,443]

Tuesday Oct 18th

US natural gas futures declined by over 5% to below $5.8/MMBtu on Tuesday, the lowest in over 3 months on a downwardly revised demand forecast for next week due to milder weather. Average US gas demand, including exports, is expected to fall to 94.9 bcfd next week, from 100.3 bcfd this week, according to Refinitiv. Prices have been falling in the past 8 weeks, amid record domestic production levels and reduced liquefied natural gas (LNG) exports that have allowed utilities to inject much bigger than normal amounts of gas into storage over the past month. The average amount of gas flowing to US LNG export plants fell to 11.0 bcfd so far in October from 11.5 bcfd in September, and below a monthly record of 12.9 bcfd in March. Meanwhile, average gas output in the US Lower 48 states rose to 99.6 bcfd so far in October from a record 99.4 bcfd in September. The EIA report showed that US utilities added 125 bcf of gas to storage last week, the 4th consecutive week of increases above 100 bcf.

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

[Blackbag99 + 20]

It is difficult to see why this would not continue for the next few weeks. 

Gas in storage is still growing in both the US & EU. Gas in storage is at historically very high rates.

Until you see gas storage drop at a faster pace than last year, we probably nowhere near the bottom of price.

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-traders-bracing-for-another-100-bcf-eia-storage-build-1168336

Natural Gas Price Fundamental Daily Forecast – Traders Bracing for Another 100+ Bcf EIA Storage Build

By:James Hyerczyk

Published: Oct 20, 2022, 06:34 CDT•3min read

The fundamentals are bearish and another 100+ Bcf storage build could help extend the sell-off with a build of 105+ Bcf spiking prices lower.

Natural gas futures are edging higher early Thursday on short-covering and position-squaring ahead of today’s U.S. government weekly storage report. Bearish news has dominated the trade this week and several analysts fear the down trend could continue for weeks and months with new weather forecasts predicting a mild winter.

At 10:59 GMT, December natural gas futures are trading $5.982, up $0.054 or +0.91%. On Wednesday, the United States Natural Gas Fund ETF (UNG) settled at $19.05, down $0.99 or -4.94%

This Week so Far….

Natural gas prices fell about 5% to a three-month low on Wednesday. That price decline, which is part of an eight-week trend, has put the futures contract down about 16% since last week’s close.

The catalysts behind the selling pressure are record output levels and reduced liquefied natural gas (LNG) exports. Both events have allowed utilities to rebuild storage levels with intense weekly gas injections. Over the past four weeks, the gas market has injected 460 Bcf into storage and dramatically trimmed the deficit to both year-ago and five-year average levels.

Refinitiv Supply/Demand Outlook Bearish

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.6 bcfd so far in October, up from a monthly record of 99.4 bcfd in September.

Meanwhile, with milder weather coming, Refinitiv projected average U.S. gas demand, including exports, would fall from 100.7 bcfd this week to 96.7 bcfd next week. The forecast for next week was higher than Refinitiv’s outlook on Tuesday.

Short-Term Weather Outlook

According to NatGasWeather for October 20-26, “A chilly early season weather system will continue across the Great Lakes & East today with rain and snow showers and chilly lows of 20s to 40s, highs of 40s and 50s.

The West and far South will be nice to warm with highs of 60s to 80s. The eastern and southern U.S. will warm into the 60s to 80s Friday to Tuesday, while the West cools and becomes unsettled with highs of 40s-60s. Overall, moderate national demand today, then light.

US Energy Information Administration Weekly Storage Report

NatGasWeather says survey averages for the morning EIA storage report suggest a build of 102-105 Bcf, larger than the 5-year average of 73 Bcf. Temperatures were near to warmer than normal over most of the US besides slightly cool across the Great Lakes and Ohio Valley. We expect a build of 105 Bcf, and it close, will improve deficits from -221 to near -190 Bcf.

Natural Gas Intelligence (NGI) predicts that today’s EIA report, due to be released at 14:30 GMT, will show another 100+ Bcf addition to inventories for the week-ending October 14.

According to NGI, Reuters polled 13 analysts, whose estimates ranged from injections of 95 Bcf to 118 Bcf, with a median forecast of 106 Bcf. Additionally, both Bloomberg and the Wall Street Journal had a tighter range of projections, with a median injection of 103 Bcf and an average injection of 102 Bcf, respectively.

A build close to these levels would easily surpass the 91 Bcf injection recorded in the year-earlier period, as well as the five-year average of 73 Bcf.

Short-Term Outlook

The fundamentals are bearish and another 100+ Bcf storage build from the EIA could help extend the sell-off. An injection of 105 Bcf or greater would be extremely bearish and could spike prices lower.

However, a spike lower could capitulate the move, leading to a possible short-covering rally late in the session, especially since today may be the last 100 Bcf injection of the season.

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

 

[Tom Nolan + 2,443]

https://www.zerohedge.com/commodities/us-natgas-slumps-six-month-low-supply-fears-ease

US NatGas Slumps To Six-Month Low As Supply Fears Ease

by Tyler Durden

Thursday, Oct 20, 2022 - 09:15 AM

US natural gas prices slid to a six-month low Thursday morning as traders speculated US stockpiles could climb even higher, easing concerns about tight supplies ahead of the heating season. 

NatGas for November delivery slid over 2% to $5.35 per million British thermal units on Nymex around 0935 ET. 

"Futures have now erased most of the rally that followed the Russian invasion of Ukraine," Bloomberg said. 

The Energy Information Administration is expected to publish a weekly report this morning that shows another large inventory build. Warmer weather in the US has also been a factor in depressing demand. 

"Survey averages for the morning EIA storage report suggest a build of +102-105 Bcf, larger than the 5-year average of +73 Bcf. Temperatures were near to warmer than normal over most of the US, besides slightly cool across the Great Lakes and Ohio Valley. We expect a build of +105 Bcf, and if close, will improve deficits from -221 to near -190 Bcf," NatGasWeather noted on its website.

Warmer weather is forecasted in the National Weather Service's 6-10 day outlook for the eastern half of the US, keeping demand for the fuel low. 

However, stockpiles are still below the 20-year average, and the Freeport terminal is expected to restart soon after a June fire.

Energy research firm Criterion Research explained more about the dynamics at play for NatGas markets heading into the cold season: 

The market has begun to shift its gaze towards the winter season as the Lower 48 got its first quick douse of cold weather this week - and the early temperature look into November has thus far shown temps slightly above normal for the continental US.  Concurrently, debates are ongoing about when/if Freeport LNG is going to restart on time.  That question remains unanswered, but the terminal does have three LNG vessels slated for arrival by the end of October and a fourth scheduled in November.  The other factor in play is production, how strong will it be once November hits and when will Appalachian production start to ramp up with its normal 4Q push.

TWITTER

1/ The PHMSA has stated that Freeport LNG will require full reg. approvals before their planned November restart can take place. It is being said that the regulator won’t clear a partial restart until all of Freeport’s proposed changes are received and accepted

2/ Freeport's feed gas nominations continued to be adjusted lower with the late cycles to <2 Mmcf/d, and this morning brought forth another moderate early cycle nomination of 65 Mmcf/d that will likely be corrected lower.

3/ However, Freeport LNG now has 3 tankers showing it as a destination, including the Prism Brilliance that is already at anchorage. They now expect Prism Diversity to arrive by October 27 and Prism Courage by November 1, 2022. #natgas #ongt (Courtesy of http://MarineTraffic.com)

4/ A fourth tanker, the Seapeak Methane LNG Carrier, currently shows Freeport (Bahamas) as its destination on the http://MarineTraffic.com map, but other portions of the data on the website show that the Seapeak Methane ship lists US FREEPORT as its destination.

 

Any blast of cold weather for an extended period could reverse the downtrend in US NatGas prices. Plus, watch export data of Freeport shipments, as they should start to increase shortly. 

[Tom Nolan + 2,443]

Late Afternoon - Thursday Oct 20

US natural gas futures dropped for the fifth straight session to $5.3/MMBtu, the lowest in seven months, after the latest EIA report showed another larger-than-usual storage build. US utilities added a more than expected 111 billion cubic feet (bcf) of natural gas to storage last week, well above a build of 91 bcf during the same week a year ago and a five-year (2017-2021) average increase of 73 bcf. Natural gas prices have been under pressure amid forecasts of lower weather-driven demand, record domestic production levels and reduced liquefied natural gas (LNG) exports, allowing utilities to inject more gas into storage. Average US gas demand, including exports, is expected to fall to 94.9 bcfd next week from 100.3 bcfd this week.

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

 

Edited October 20, 2022 by Tom Nolan

[Tom Nolan + 2,443]

Friday morning Oct 21

US natural gas futures fell more than 20% to below $5.2/MMBtu this week, the 9th consecutive week of falls and the lowest level in seven months, pressured by forecasts of lower weather-driven demand, record domestic production levels, and reduced liquefied natural gas (LNG) exports, allowing utilities to inject more gas into storage. The latest EIA report showed another larger-than-usual storage build last week, with US utilities adding a more than expected 111 billion cubic feet (bcf) of natural gas to storage, well above 91 bcf injected during the same week a year ago and a five-year (2017-2021) average increase of 73 bcf. Average US gas demand, including exports, is expected to fall to 94.9 bcfd next week from 100.3 bcfd this week.

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

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/US-LNG-Production-Declines-Despite-Robust-Demand.html

U.S. LNG Production Declines Despite Robust Demand

By Irina Slav - Oct 21, 2022, 2:06 AM CDT

• The flow of natural gas to liquefaction plants along the Gulf Coast has declined in October, largely due to maintenance and outages.
• S. LNG exports could start to rise this week as some traders expect Cove Point to return to service soon.
• Demand for LNG is set to remain robust this winter, and U.S. exports are likely to soar again when Freeport LNG returns to service.

Join Our Community

Natural gas flows to liquefaction plants along the Gulf Coast have been on the decline since the start of October, reflecting a decline in LNG production prompted by maintenance and outages.

The Cove Point LNG facility is undergoing regular maintenance and Freeport LNG remains shut after an explosion in June.

This will likely change as Cove Point is expected to return to regular operation soon and Freeport is preparing to resume normal operation as well, although it first needs to secure full approval for the restart.

The average daily volume of gas flows from U.S. fields to the liquefaction trains in the South stood at 11.1 billion cubic feet, Refnitiv data cited by Investing.com showed.

That’s down from 11.5 billion cubic feet for September and further down from the record 12.9 billion cubic feet daily booked in March as demand for U.S. LNG from Europe surged.

This demand is still robust, keeping the price difference big enough to motivate consistently record-high exports. Yet LNG producers are nearing their capacity limits and demand for their product is unlikely to subside any time soon.

Indeed, this week media reported that LNG carriers are clogging Spain’s import terminals because there are more ships than offload points in the EU member with the largest LNG import capacity.

As demand for U.S. LNG from international markets rises, however, so do domestic gas prices, sparking concern about the affordability of energy this heating season in those parts of the U.S. that need heating.

Earlier this week, the Federal Energy Regulatory Commission said it expected natural gas prices this winter to be higher than the average for recent years, all because of higher exports.

"Forecasts anticipate that continued growth in net exports, including from liquefied natural gas (LNG) export facilities, will place additional pressure on natural gas prices this winter," the FERC said.

This will be true even if domestic gas production continues growing and even if the rate of its growth exceeds the growth rate of demand, FERC also said, as quoted by Reuters.

FERC has forecast the average Henry Hub price for this year at $6.82 per mmBtu, which would be 30 percent higher than the average for last year.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• 83% Of Americans Are Concerned About High Gasoline And Energy Prices
• Consequences Or Cooperation: How Will The U.S. Deal With OPEC?
• Biden Is Running U.S. Energy Security Into The Ground

[Tom Nolan + 2,443]

https://www.zerohedge.com/weather/germany-stave-worsening-energy-crisis-mild-temps-forecasted-through-mid-november

Germany May Stave Off Worst Of Energy Crisis As Mild Temps Forecast Through Mid-November

by Tyler Durden

Saturday, Oct 22, 2022 - 08:55 AM

Germany's national weather service, the Deutscher Wetterdienst (DWD), released a new report Friday showing temperatures across the country will be well above average through mid-November. This promising forecast could stave off a worsening energy crisis (for now). 

DWD's month-ahead forecast expects warmer-than-normal temperatures in Germany through at least mid-November. A weather model via Bloomberg shows above-average weather. 

article continues...

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/LNG-Bottlenecks-Are-Emerging-In-Crisis-Stricken-Europe.html

LNG Bottlenecks Are Emerging In Crisis-Stricken Europe

By Irina Slav - Oct 22, 2022, 6:00 PM CDT

• LNG tanker rates are surging as European demand for liquified gas soars.
• Tanker rates are also soaring because traders use tankers as floating storage facilities.
• Freeport LNG could return to normal operations by the end of next month.

Join Our Community

European countries have boasted that their gas storage facilities have been filled at higher than usual levels before the start of winter. Yet more LNG cargos are arriving in Europe at such rates that they are jamming ports. And freight rates are through the roof, adding to already record LNG prices. Earlier this week, media reported that there were more than 30 LNG tankers idling off the coast of Spain, waiting to unload at one of its regasification terminals. Clearly, these terminals were not sufficient for the surge of LNG imports into the country, which sports the most LNG import terminals in Europe, at a total of six.

Yet Spain is not the only one in an “exceptional operational situation,” as the government in Madrid called it. There are dozens of LNG tankers waiting to unload or serving as floating storage near other European ports as well. And as the LNG rush to Europe continues, an LNG tanker shortage is looming large.

“Every natural-gas buyer who is serious has taken LNG carriers into their portfolio,” Jefferies shipping research head Omar Nokta told the Wall Street Journal. “There is very limited capacity out there and it’s super expensive to get.”

It’s the oldest of laws about supply and demand at work, but this same law is also pushing freight rates for LNG carriers sky-high, which is adding to already substantial LNG import bills in Europe and Asia.

According to Baltic Exchange data cited in the Wall Street Journal report, spot market LNG tanker rates have gone up sixfold since the start of the year, reaching $450,000 per day this week.

Brokers expect this to rise further to half a million dollars daily as demand remains strong ahead of winter. And that might not be the ceiling because one UK brokerage has forecast freight rates could soar to as much as $1 million per day before the year’s end.

Related: Biden Is Running U.S. Energy Security Into The Ground

An additional factor making the shipment of LNG more expensive is that a substantial portion of the available LNG fleet is currently being used as floating storage as traders await the price of the commodity to go higher still as winter begins. The Reuters report about the LNG tanker jams noted that LNG prices for delivery in November and December are $2 mmBtu higher than current prices.

The jams are also turning some of the tankers waiting to unload into floating storage, at least temporarily, helped by a dip in demand because of warmer-than-usual weather in Spain and lower industrial demand for gas across Europe because of the slowdown in economic activity, which in turn was caused by the gas shortage that began last year.

There’s more expensive news on the horizon, too. The restart of Freeport LNG, which shut down after a fire in June, hurting the affordability and availability aspects of Europe’s new-found LNG addiction, could be delayed.

Rystad Energy, the Norwegian energy consultancy, forecast recently that Freeport LNG could return to normal operations by the end of next month, but added that there is still the possibility of a delay. This delay, Rystad noted, could push gas prices higher in the United States. Higher U.S. gas prices would automatically increase LNG prices for the international market as well.

This is happening as the European Union tries to put its foot down and say it will install a ceiling on LNG prices. A proposal to that effect was made this week by the Commission and was discussed by European leaders at a meeting that took place on Thursday.

Even before the meeting, an agreement was unlikely as member states are split on the issue, but the push to tame gas prices and consequently, inflation is strong and some form of price control might end up being agreed to reduce the price pain.

There is some silver lining despite all the bad price news. China’s LNG imports are expected to decline sharply due to weak demand and high spot market prices, which will free up more cargos for Europe. It’s only too bad it cannot build more LNG import terminals in weeks.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• More Drones Spotted Over Norwegian Oil Infrastructure
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• 83% Of Americans Are Concerned About High Gasoline And Energy Prices

[notsonice + 1,255]

$4 Nat gas November contract on its way by this Friday, Short sellers are making a killing. A market collapsing.

 

Warm Weather across the US for the next week....78 degrees in Chicago today

 

another big drop later today??????? Long speculative positions are getting creamed.......margin calls are mounting......... GS bet again on a loser????, they sure took the wrong bet at $130 Brent by year end

 

just two weeks ago this site was pumping nat gas......

The benchmark U.S. natural gas prices rose by more than 3% early on Thursday ahead of the weekly EIA gas inventory report, to the highest level in two weeks, amid expectations of higher demand for the fuel next week.

What where these higher demand expectations based on????? smoke???? yet they posted 

 a forecast of a bigger-than-average gas in storage build expected to be reported by the EIA later today. The steeper-than-average stock build was expected due to milder weather in the past days, halts of two LNG export facilities, and a rise in wind power generation.

 

Thank God to Sleepy Joe boosting heat pumps, Solar and  Wind Power and the US putting renewables on a fast track

 

Who needs nat gas at $6  $7 , $8, $9 or $10when renewables produce electricity at half the price of Nat Gas and Coal today

 

U. S.Demand for natural gas across the United States is expected to rise in the coming days more than previously expected. U. S. Natural Gas Prices Jump To Two-Week High

By Charles Kennedy - Oct 06, 2022, 11:00 AM CDT

• U.S. natural gas prices rose by more than 3% early on Thursday.
• Demand for natural gas across the United States is expected to rise in the coming days more than previously expected.
• Estimates point to the EIA reporting later today a build of 113 billion cubic feet (bcf) of gas in storage.

Join Our Community

The benchmark U.S. natural gas prices rose by more than 3% early on Thursday ahead of the weekly EIA gas inventory report, to the highest level in two weeks, amid expectations of higher demand for the fuel next week.

As of 9:05 a.m. ET on Thursday, the front-month futures at the Henry Hub, the U.S. benchmark, were trading 3.20% higher at $7.125 per million British thermal units (MMBtu). Demand for natural gas across the United States is expected to rise in the coming days more than previously expected, according to Reuters estimates.

U.S. natural gas prices were rising early on Thursday despite a forecast of a bigger-than-average gas in storage build expected to be reported by the EIA later today. The steeper-than-average stock build was expected due to milder weather in the past days, halts of two LNG export facilities, and a rise in wind power generation.

Estimates point to the EIA reporting later today a build of 113 billion cubic feet (bcf) of gas in storage for the week that ended September 30. While generally in line with the build from the same week of 2021, this would be above the five-year average build in gas in storage stocks of 87 bcf, according to Reuters.

Gas demand has faltered lately due to mild weather and power outages in Florida after Hurricane Ian. Moreover, there has been more gas available domestically in recent days as the Cove Point LNG export facility in Maryland started a three-week annual planned maintenance on October 1.

The Freeport LNG export facility continues to be out until at least early November after a fire in June.

Earlier this week, U.S. natural gas futures dipped by 6% on Monday, extending losses from Friday, as market participants fretted over receding domestic demand prospects, rising production, and possible disruption for American LNG exports.

By Charles Kennedy for Oilprice.com

 

 

Edited October 23, 2022 by notsonice

[Tom Nolan + 2,443]

13 hours ago, notsonice said:

Short sellers are making a killing.

I did make a killing.  I was on that side of the trade.

Edited October 24, 2022 by Tom Nolan

[Tom Nolan + 2,443]

Monday Oct 24th

Natural gas futures linked to TTF, Europe's wholesale gas price, touched €100 per megawatt-hour (98.50)on Monday, a new low since early June and about 70% down from the highs of August as fears over shortages in winter eased again. The weather in Europe is expected to remain milder than usual for this time of the year until the end of the month. At the same time, ample supplies of LNG allowed Europe's gas storage sites to get filled with Germany's stockpile rate reaching 96%. Also, last week, the European Union governments came together to back urgent measures to tackle the high cost of energy, including a price cap, on top of a plan to set up joint natural gas purchases.

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

UK natural gas futures fell to 180 pence a therm in the fourth week of October, the lowest in 4-months and tracking a decline in the European benchmark on the back of easing supply concerns. UK natural gas prices are down more 70% since a record closing of 640 hit in August, as temperatures are set to stay above average until the end of October, and strong wind output reduces demand for gas from power plants. Elsewhere, French grid operator RTE said it would be possible to export power to Britain during extreme stress as France and the UK don't have their peak times at the exact moment. Meanwhile, investors monitor political developments, after last Chancellor Jeremy Hunt said that the energy price guarantee, which meant the typical UK household would pay no more than £2,500 per year on energy, will only last in its current form until April next year.

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

 

[Tom Nolan + 2,443]

https://www.zerohedge.com/weather/when-can-you-expect-el-nino-and-la-nina

When Can You Expect El Niño And La Niña?

by Tyler Durden

Sunday, Oct 23, 2022 - 10:30 PM

 

Temperature Flexible Seasonal Forecast - MAP

http://iridl.ldeo.columbia.edu/maproom/Global/Forecasts/NMME_Seasonal_Forecasts/temp_full.html

~~~~~~~~~~~~~~~~~~~~~~

https://www.statista.com/chart/28500/oil-and-gas-exploration/

 

Edited October 24, 2022 by Tom Nolan

[Tom Nolan + 2,443]

Before US Market open on Monday Oct 24th

Weekly Waves 24 October: EUR/USD, Bitcoin and Natural Gas

By:Chris Svorcik

Published: Oct 24, 2022, 04:35 CDT

https://www.fxempire.com/forecasts/article/weekly-waves-24-october-eur-usd-bitcoin-and-natural-gas-1171670

Natural Gas Strong Bearish Drop Approaches $5 Support

Natural Gas is dropping lower quickly as we anticipated last week:

1. The bearish decline has been marked as a wave 3 (green).
2. Price action could however stop at the support zone (blue) and make a bounce.
3. A mild bullish correction marks the end of wave 3 (green) and the start of wave 4 (green).
4. A bearish breakout (orange arrow) below the corrective pattern indicates a downtrend continuation towards the next Fibonacci target.
5. This could complete wave 5 (green) of wave 5 (yellow) of wave 3 (pink) of A (gray).
6. A deeper bullish retracement above $6.4 places this bearish Elliott Wave analysis on hold.

https://responsive.fxempire.com/cdn/n/n/_fxempire_/2022/10/24.10.2022_NGAS.png

[Tom Nolan + 2,443]

Bloomberg Monday Oct 24

https://finance.yahoo.com/news/texas-natural-gas-drops-toward-162250182.html

Texas Natural Gas Drops Toward Zero as Output Swamps Pipelines

(Bloomberg) -- Natural gas prices in the Permian Basin of West Texas are plunging toward zero as booming production overwhelms pipeline networks, creating a regional glut of the fuel.

Gas in an area of the vast Permian known as Waha was trading for as little as 20 cents to 70 cents per million British thermal units on Monday, traders said. That compares with the US benchmark futures contract that’s trading around $5 and European prices close to $28.

If West Texas prices tumble into negative territory, energy producers will effectively be paying someone to take gas off their hands -- something that hasn’t happened in two years.

The price collapse illustrates the sharp contrast between bountiful US supplies of the fuel and Europe’s worsening energy crisis as winter approaches. Tight gas markets in Europe and Asia threaten to have knock-on effects for diesel, coal and power as governments and utilities scramble for energy, according to Bloomberg Intelligence.

The Texas price plunge stems from maintenance scheduled for Kinder Morgan Inc.’s Gulf Coast Express and El Paso Natural Gas pipeline systems.

Insufficient pipeline capacity has actually been a long-term problem that has dogged Permian Basin gas producers for years. The choke points worsen when pipeline operators must perform repairs and preventative maintenance work that forces temporary reduction in pressure or halts to shipping.

Permian pipeline constraints “have never been relieved,” making the region more susceptible to sudden gluts and price volatility, said Campbell Faulkner, chief data analyst at OTC Global Holdings LP.

An early-October disruption in polar vortex formation -- making it more elongated -- is channeling colder air toward the upper northern hemisphere, including the US, Canada, Europe and China, as Severe Weather Europe suggests. That could raise the specter of energy shortages as heating needs spike, stoking strong demand for natural gas, coal and oil products.

Waha gas went negative eight times times in 2020 and more than two dozen times in 2019, data compiled by Bloomberg shows.

[Tom Nolan + 2,443]

Afternoon Monday Oct 24

Natural Gas Rebounds After Strong Sell-Off

Natural gas found support at $4.75 and moved above the resistance at $5.10 amid profit-taking after the major sell-off.

The weather forecast remains unfavorable for high natural gas consumption, but it has no impact on price dynamics today as natural gas markets were oversold.

 

The nearest significant resistance level for natural gas is located at $5.35. In case natural gas settles above this level, it will move towards the next resistance at $5.70. A successful test of this level will push natural gas towards the resistance at $6.00.

On the support side, natural gas needs to settle back below $5.10 to have a chance to gain downside momentum in the near term. The next support level for natural gas is located at $4.90. If natural gas declines below this level, it will move towards the support at the recent lows at $4.75.

https://www.fxempire.com/forecasts/article/natural-gas-moved-back-above-the-5-00-level-1172116

By:Vladimir Zernov

Published: Oct 24, 2022, 10:56 CDT

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Texas-Natural-Gas-Prices-Sink-Close-To-Zero.html

Texas Natural Gas Prices Sink Close To Zero

By Julianne Geiger - Oct 24, 2022, 2:00 PM CDT

While U.S. natural gas futures gained more than 4% on Monday, natural gas in the Waha part of the Permian Basin was falling and trading close to zero, traders told Bloomberg on Monday.

Flourishing natural gas production in the Permian has swamped pipelines, putting an undue burden on takeaway capacity, resulting in an oversupply situation that has caused natural gas prices to sag to as low as 20 cents per MMBTU, traders have reported, and up to 70 cents per MMBTU.

That compares with overall U.S. natural gas futures that are trading at more than $5 per MMBTU. Meanwhile, Europe’s nat gas prices are upwards of $25 per MMBTU. U.S. natural gas futures were up on Monday as hopes that several LNG plants were expected to come back online soon after weeks of maintenance, including Cove Point LNG and Freeport. Those prices were as high as $8  per MMBtu in September.

But scheduled maintenance for Gulf Coast Express and El Paso Natural Gas pipeline systems continue to dampen exports for Waha. Kinder Morgan is conducting maintenance at its Gulf Coast Express Pipeline beginning on October 25 at its Rankin, Devils River, and Big Wells Compressor Station. KMI expects the volumes to be reduced to 1,325,000 on Tuesday and Wednesday, and to 1,125,000 on Thursday and Friday. KMI’s EL Paso Natural Gas Company is expected has had a rash of maintenance performed on multiple lines since the beginning of October.

U.S. natural gas production was up last week, and the warmer weather has added to U.S. storage inventories.

Waha is the key natural gas pricing point for Mexico.

The Permian basin has been plagued by takeaway capacity constraints, “making the region more susceptible to sudden gluts and price volatility,” Campbell Faulkner, chief data analyst at OTC Global Holdings LP, told Bloomberg.

Waha gas went negative 20 times in the last 3 years, data analyzed by Bloomberg showed. 

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• Biden’s Plan To Refill The SPR Is Unlikely To Boost U.S. Oil Output
• Colombia Is On The Brink Of An Energy Crisis
• Biden Just Put A Floor Under Oil. Will It Work?

[Tom Nolan + 2,443]

22 hours ago, Tom Nolan said:

https://www.zerohedge.com/weather/when-can-you-expect-el-nino-and-la-nina

When Can You Expect El Niño And La Niña?

EXCERPT

And mainstream media outlets like WaPo cite researchers who blame "climate change" for Australia's flooding. We will note the UN Office for the Coordination of Humanitarian Affairs, stating: "El Nino and La Nina are naturally occurring climate patterns and humans have no direct ability to influence their onset, intensity or duration." 

https://www.zerohedge.com/weather/la-nina-transforms-australian-desert-wetlands

La Nina Transforms Australian Desert Into Wetlands

[Tom Nolan + 2,443]

Before US market open

Natural Gas Price Fundamental Daily Forecast – Underpinned by Slight Shift in European Weather Model

By:James Hyerczyk

Published: Oct 25, 2022, 06:17 CDT

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-underpinned-by-slight-shift-in-european-weather-model-1170417

 

The European model, a much warmer than its American counterpart in recent days, added several heating degree days on colder trends over the weekend.

 

Natural gas futures are trading higher on Tuesday after posting a dramatic technical reversal bottom the previous session.

The market rallied nearly 5% after testing a fresh seven-month low earlier in the session on Monday. Helping to fuel the turnaround in the market were a number of factors including oversold technical indicators, reports of a slight change in a weather model and expectations demand would rise as liquefied natural gas (LNG) exports increase once export plants exit maintenance outages in coming weeks.

At 10:50 GMT, December natural gas futures are trading $5.803, up $0.50 or +0.87%. On Monday, the United States Natural Gas Fund ETF (UNG) settled at $18.58, up $0.76 or +4.26%.

European Weather Model Adds Several Heating Degree Days

Weather models continue to paint a generally bearish pattern over the next couple of months. The European model, a much warmer than its American counterpart in recent days, added several heating degree days (HDD) on colder trends over the weekend.

That could have aided Monday’s rally, but both data sets remain “exceptionally bearish overall” and still are more than 50 HDDs warmer than normal through the first week of November, according to NatGasWeather.

“The start of November maintains a bearish setup as most of the U.S. will be 10-25 degrees warmer versus normal,” the forecaster said. “It will take much colder weather maps for bearish weather headwinds to end, and we continue to look at mid-November for the next best opportunity.”

Major LNG Outages Continue but Close to Ending

Major LNG outages include Berkshire Hathaway Energy’s shutdown on October 1 of its 0.8 billion-cubic-feet-per-day (bcfd) Cove Point LNG export plant in Maryland for about three weeks of planned maintenance and the shutdown of Freeport’s 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. Freeport expects the facility to return to at least partial service in early to mid-November, Reuters reported.

Traders are anticipating a shift in sentiment once these outages come to an end and demand starts to increase.

Short-Term Outlook

While yesterday’s rally may have been fueled by oversold technical factors that still exist ahead of Tuesday’s session, we suspect that any technically driven rally will be short-lived until the fundamentals turn bullish. Right now that is not the case so any gains are likely to be limited.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 99.5 bcfd so far in October, up from a monthly record of 99.4 bcfd in September. This is bearish news.

At the same time, with the coming of seasonally cooler weather, Refinitiv projected average U.S. gas demand, including exports, would rise from 93.9 bcfd this week to 97.1 bcfd next week.

This is a potentially bullish development that is currently being monitored closely because it could help neutralize the bearish sentiment enough to fuel a meaningful short-covering rally.

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

[Tom Nolan + 2,443]

EXCERPT

At one point in the morning, front-month Dutch TTF futures, which serve as a benchmark for northwest Europe, were down over 10% at 101.39 euros a megawatt-hour, having opened at a new four-month low of 100 EUR/MWh.

But what is more remarkable is that the lack of storage availability - similar to what happened in April 2020 when WTI briefly traded as far negative as -$40 - has forced ultra-short term spot prices to collapse as those assigned delivery (without a place to store the gas) were literally paying others to take the gas off their hands!

And sure enough, early on Monday, the "next hour"  TTF contract briefly dipped as far negative as -€15.78, the lowest on record as there was simply nowhere to park the nat gas.

From...

https://www.zerohedge.com/markets/european-nat-gas-prices-briefly-turn-negative-amid-sudden-lack-storage

European Nat Gas Prices Briefly Turn Negative Amid Sudden Lack Of Storage

by Tyler Durden

Tuesday, Oct 25, 2022 - 04:45 AM

Last week we pointed out a bizarre development off the coast of the energy starved European continent: some 35 LNG carriers were idling off the coast of Spain (the country which has six LNG import and regasification terminals and is the biggest LNG importer in the EU). [ARTICLE CONTINUES]

[Tom Nolan + 2,443]

Bloomberg Tuesday Oct 25th (while US NatGas climbed again during the short squeeze reaching $5.60 around noon.)

https://finance.yahoo.com/news/west-texas-natural-gas-prices-145906855.html

West Texas Natural Gas Prices Go Negative for First Time in Two Years

(Bloomberg) -- Natural gas prices in West Texas dipped below zero for the first time since 2020 as booming production overwhelms pipeline networks, trapping supplies in the region.

Gas for next-day delivery at the Waha hub in the prolific Permian Basin fell to around negative $2 per million British thermal units Tuesday, traders said. That compares with about $5 a week ago.

Producers are effectively paying someone to take gas off their hands -- something that hasn’t happened in two years. Seasonal pipeline maintenance is worsening existing constraints on the region’s network of gas conduits as mild weather curbs consumption.

America’s gas output surged to a record this year as global supply disruptions buoy prices of the heating and power-plant fuel and boost demand for US exports. Much of the gain was driven by Texas, which has long enjoyed some of the lowest energy prices in the country thanks to its vast oil and natural gas reserves. Politicians there have used the shale boom to brag about the state’s low taxes, unemployment rates and fuel costs.

Even Europe, starved of the Russian imports it has long needed, has replenished its stockpiles. But the risk of a winter gas crisis remains for countries on both sides of the Atlantic. US regulators have warned of shortages in the Northeast, a region that relies on gas from overseas to make it through the coldest months.

In the US, regulators limit how much gas producers can burn off in a process known as flaring, which releases carbon dioxide. That’s contributing to the Permian supply glut, according to Paul Phillips, a senior strategist at risk-management firm Uplift Energy Strategy in Denver.

“A crackdown on flaring both from regulators as well as self-imposed by some of the companies themselves has forced the spot market to go negative as sellers desperately look for outlets for their gas,” Phillips said.

Permian prices will probably remain under pressure through the end of the week until pipeline maintenance is completed, according to Jason Ferguson, an analyst at analysis firm RBN Energy LLC.

Meanwhile, US benchmark natural gas futures surged Tuesday amid speculation that a recent selloff has run its course. Contracts for the heating and power-generation fuel delivered at the Henry Hub in Louisiana, which is not directly affected by pipeline constraints in Texas, have fallen for nine straight weeks, the longest losing streak in three decades. A faster-than-usual rebound in stockpiles has helped ease fears of shortages this year.

November gas futures rose 7.4% to $5.586 per million Btu at 12:34 p.m. in New York.

 

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/Texas-Natural-Gas-Prices-Go-Negative.html

Texas Natural Gas Prices Go Negative

By Julianne Geiger - Oct 25, 2022, 10:00 AM CDT

• Gas prices in the Waha part of the Permian basin fell to 20 cents per MMBtu on Monday.
• On Tuesday morning, Waha hub gas prices dipped into negative territory.
• Waha hub pricing faces pressure from the unfortunate combination of unseasonably warm weather, flourishing production, and takeaway capacity constraints.

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Yesterday, Waha natural gas sank to near zero levels. On Tuesday, they sank below it.

On Monday, natural gas in the Waha part of the Permian Basin fell to 20 cents per MMBtu, traders said. But on Tuesday, they fell even further, with traders reporting that offers for the Waha grade sank to -$2 per MMBtu, compared to the Nymex X22, which was trading at $5.305 per MMBTU.

Europe’s natural gas pricing is falling now that most countries have reached their desired storage levels but are still more than $25 per MMBTU. France’s President Emmanuel Macron last week lashed out at the United States over this “double standard” for its energy policies that have resulted in such disparate natural gas pricing that has the U.S. enjoying cheap domestic gas while selling it to European allies at exponential rates. France’s imports of US LNG have increased 421% during the first eight months of the year.

The Texas natural gas known as Waha is the key natural gas pricing point for Mexico—and it has faced pricing pressure from the unfortunate combination of unseasonably warm weather, flourishing production, and takeaway capacity constraints, partly stemming from a rash of pipeline maintenance.

Kinder Morgan is conducting maintenance at its Gulf Coast Express Pipeline beginning on October 25 at its Rankin, Devils River, and Big Wells Compressor Station. KMI expects the volumes to be reduced to 1,325,000 on Tuesday and Wednesday, and to 1,125,000 on Thursday and Friday. KMI’s EL Paso Natural Gas Company has been undertaking maintenance on multiple lines since the beginning of October.

Waha sinking into negative territory is not a new occurrence. Waha sank into negative territory more than a dozen times over the last three years, Bloomberg data showed on Monday.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• Biden’s Plan To Refill The SPR Is Unlikely To Boost U.S. Oil Output
• Colombia Is On The Brink Of An Energy Crisis
• Biden Just Put A Floor Under Oil. Will It Work?

[Blackbag99 + 20]

It probably important to mention that the news from French EDF Nuclear fleet is that it is likely to resume full output this winter. The power output largely displaces Gas generation that has been deployed in the region to cover the outage.

Just looking at the UK market alone, imports from France have dropped 73% YTD 2022 versus prior year 2021.

Winter may provide more bearish news beefore Winter    starts in earnest.

EDF will meet French nuclear output goals, new CEO to tell parliament | Reuters

[Tom Nolan + 2,443]

Wednesday early AM U.S.

Natural Gas Price Fundamental Daily Forecast – Bracing for Heightened Volatility Ahead of Options Expiration

By:James Hyerczyk

Published: Oct 26, 2022, 07:04 CDT

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-bracing-for-heightened-volatility-ahead-of-options-expiration-1174712

 

Traders may set aside the fundamentals over the next two sessions as the focus shifts to November options expiration and contract settlement.

Natural gas futures are inching lower on Wednesday after two-straight days of counter-trend buying drove the futures contract to its highest level in a week.

Traders are saying the two-day short-covering rally is being fueled by a number of factors including oversold technical conditions, options expiration, cooler weather forecasts and soon to be renewed liquefied natural gas demand.

At 11:31 GMT, December natural gas futures are trading $6.047, down $0.119 or +1.93%. On Tuesday, the United States Natural Gas Fund ETF (UNG) settled at $20.01, up $1.43 or +7.70%.

Heightened Volatility Expected Ahead of Futures Expiration

“The rapidly approaching November options expiration tomorrow and final settlement Thursday will soon overtake fundamentals in dictating near-term price moves … with a gaping November-to-December spread, continued volatility appears likely,” analysts at energy consulting firm EBW Analytics said in a report.

Short-Term Weather Outlook

The market is finding some support from new forecasts calling for bouts of colder weather in November.

Natural Gas Intelligence (NGI) reported that Maxar’s Weather Desk observed cooler trends for the western Lower 48 in its latest six- to 10-day forecast (Sunday through Nov 3). Forecasting for the eastern half of the country, however, continued to show warmer-than-normal conditions.

“Changes are mostly minimal for the eastern half, where temperatures are on the warm side,” Maxar said. “Much aboves are from the Midwest to the East during the mid to late period, in advance of a storm system entering the Plains and Midwest at the end of the period.”

A “more amplified” pattern in the 11- to 15-day period (Nov. 4-8) resulted in colder trends for the West and warmer trends for the East, according to Maxar.

“Below normal temperatures favor the West from early to mid-period, including much bellows in parts of the Rockies,” Maxar said. “Above to much above normal temperatures are in the eastern Midwest, South and East.”

Additionally, NatGasWeather credited “oversold conditions” and well as forecasts for colder weather – and stronger heating demand – in November for the two day surge in prices.

Looking Ahead to Thursday’s EIA Storage Report

Looking ahead to Thursday’s EIA print for the week-ending October 21, NGI is reporting that early estimates submitted to Reuters ranged from injections of 40 Bcf to 102 Bcf, with an average increase of 62 Bcf. Preliminary results of a Bloomberg poll landed at an average of 59 Bcf. The estimates compare with a five-year average of 66 Bcf and point to an easing of the recent spike in supplies.

Daily Outlook

We don’t see too much in the news to prevent the short-covering rally from continuing other than general nervousness ahead of the futures and options expiration and the Energy Information Administration (EIA) weekly storage report on Thursday.

Given that match-up, we do anticipate heightened volatility as bullish traders continue to try to build a solid support base while forcing weaker short-sellers to cover.

Seasonal expectations point to higher markets over the near-term, but I think gains could be limited until stubborn shorts are removed from the market.

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