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Based on Joe's forecast, we should see over a TCF of natural gas drawn from storage over the next four weeks. Next week's report (for the week ending Jan 18) will be around the 5-year average and maybe lower. But after that we are going to see draws much larger than the 5-year average. I now expect the deficit to the 5-year average to double by February 15th, taking storage under 1,400 Bcf with six weeks of winter remaining.
Chicago is the "Bull's Eye" for natural gas demand. Check this out: https://www.wunderground.com/forecast/u ... alwx_10day
VERY BULLISH outlook for natural gas demand
VERY BULLISH outlook for natural gas demand
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: VERY BULLISH outlook for natural gas demand
Dan,
Any sense on what is driving drop in natural gas prices today? Is it profit taking? I can't seem to find anything on the move.
Thx
Dave
Any sense on what is driving drop in natural gas prices today? Is it profit taking? I can't seem to find anything on the move.
Thx
Dave
Re: VERY BULLISH outlook for natural gas demand
The day to day moves in commodity prices is almost impossible to explain. My "SWAG" is that a lot of funds tighten up their stop loss orders over the weekend. If so, then on large sale can cause a cascade of computer generated sales.
Also, as we approach the end of January the February futures contracts must be closed. March becomes the "front month" late this week.
Also, as we approach the end of January the February futures contracts must be closed. March becomes the "front month" late this week.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: VERY BULLISH outlook for natural gas demand
An excerpt from today's Hightower Daily Update on Energy for Natural Gas:
"The natural gas market enters the new trading week in an old gap area and with vulnerable charts. While the market might draft some support from a four rig decline in gas drilling last week, temperatures in the US look to warm up tomorrow before isolated extreme cold is seen in the upper Midwest on Thursday. Unfortunately for the bull camp much below normal temperatures look to be restricted to the upper Great Lakes area. With the downshift in global economic sentiment accompanied by stories that Chinese gas demand/imports might be reduced ahead, the bear camp clearly has the fundamentals operating in their favor. Initial support and failure point is seen at the $3.04 and a gap filling retest of $3.002 could be in the offing this week."
"The natural gas market enters the new trading week in an old gap area and with vulnerable charts. While the market might draft some support from a four rig decline in gas drilling last week, temperatures in the US look to warm up tomorrow before isolated extreme cold is seen in the upper Midwest on Thursday. Unfortunately for the bull camp much below normal temperatures look to be restricted to the upper Great Lakes area. With the downshift in global economic sentiment accompanied by stories that Chinese gas demand/imports might be reduced ahead, the bear camp clearly has the fundamentals operating in their favor. Initial support and failure point is seen at the $3.04 and a gap filling retest of $3.002 could be in the offing this week."
Re: VERY BULLISH outlook for natural gas demand
Jan. 23 Daily Hightower Report on Natural Gas
"We attribute the initial gains this morning in natural gas to the extreme oversold condition of the market yesterday.
However technical traders will note that the market filled a gap left earlier in the month and now appears to have
bounced from that level as if some temporary value has been found. The bull camp should also be emboldened by
evidence that China imported record LNG supplies last month and that China continued to be the world's second
largest gas user in 2018! However a thick layer of fundamental resistance hangs over prices given a lack of sustained
severe cold ahead and the longs should be hesitant from the severe declines of the prior five trading sessions.
Furthermore a recent forecast model showed a significant warm up across much of the US for the first week of
February which should leave fundamental resistance hanging over prices. In a potentially supportive longer-term
development the German government is promising to "cushion" its consumers from higher electricity costs as the
country continues to shift from cheap coal-based power to more expensive LNG. The March/April spread (a proxy for
late season tightness) closed at 18.1 cents, down -17.5 cents, the largest selloff of the year. The early estimate for this
week's inventory report is a 155 bcf withdrawal versus the five year average of a 185 bcf decline. Total inventories
stand at 2,533 bcf as of January 11th which is 11% below the five year average and 3% below last year but production
rebounds were seen in Texas, Colorado, Louisiana and New Mexico which could offset the rise in usage. The market
closed below the 200 day moving average at $3.103 for the first time since November 2nd and momentum indicators
have stalled and the stochastics look to cross over with a sell signal."
Dan, in reading highlighted section above, the forecast appears inconsistent with Dr. Joe. I'm wondering if government shutdown is impacting long-term weather forecasting. Thoughts?
"We attribute the initial gains this morning in natural gas to the extreme oversold condition of the market yesterday.
However technical traders will note that the market filled a gap left earlier in the month and now appears to have
bounced from that level as if some temporary value has been found. The bull camp should also be emboldened by
evidence that China imported record LNG supplies last month and that China continued to be the world's second
largest gas user in 2018! However a thick layer of fundamental resistance hangs over prices given a lack of sustained
severe cold ahead and the longs should be hesitant from the severe declines of the prior five trading sessions.
Furthermore a recent forecast model showed a significant warm up across much of the US for the first week of
February which should leave fundamental resistance hanging over prices. In a potentially supportive longer-term
development the German government is promising to "cushion" its consumers from higher electricity costs as the
country continues to shift from cheap coal-based power to more expensive LNG. The March/April spread (a proxy for
late season tightness) closed at 18.1 cents, down -17.5 cents, the largest selloff of the year. The early estimate for this
week's inventory report is a 155 bcf withdrawal versus the five year average of a 185 bcf decline. Total inventories
stand at 2,533 bcf as of January 11th which is 11% below the five year average and 3% below last year but production
rebounds were seen in Texas, Colorado, Louisiana and New Mexico which could offset the rise in usage. The market
closed below the 200 day moving average at $3.103 for the first time since November 2nd and momentum indicators
have stalled and the stochastics look to cross over with a sell signal."
Dan, in reading highlighted section above, the forecast appears inconsistent with Dr. Joe. I'm wondering if government shutdown is impacting long-term weather forecasting. Thoughts?