Working gas in storage was 3,614 Bcf as of Friday, November 29, 2013, according to EIA estimates. This represents a net decline of 162 Bcf from the previous week. Stocks were 200 Bcf less than last year at this time and 104 Bcf below the 5-year average of 3,718 Bcf.
A draw this large in the last week of November is VERY BULLISH for natural gas prices. This coming weeks weather forecast is also very bullish. We now have a shot at Ngas moving over $4.50 by year-end.
Keep an eye on the storage level compared to last year. It may be 400 bcf below last year by Christmas.
This is great stuff for CRK, RRC, UNT, SM, XEC, EOG, EXXI
Natural Gas Storage Report - Dec. 5
Natural Gas Storage Report - Dec. 5
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Dec. 5
I went back and looked at the storage reports for last December. They were very bearish. In fact, the report for the week ending 12-2-2012 was a 2 bcf add to storage. So, with this Thursday's report we should see 350 bcf less in storage than last year.
Based on the weather forecasts that I have seen for the next two weeks, it now appears storage levels will be more than 400 bcf below last year's levels before Christmas and maybe as much as a 500 bcf differential. That would be VERY BULLISH for natural gas prices.
Unless there is a major change in the North American weather pattern, which I am not seeing forecast anywhere, there should be strong support for gas prices well into next spring.
Based on the weather forecasts that I have seen for the next two weeks, it now appears storage levels will be more than 400 bcf below last year's levels before Christmas and maybe as much as a 500 bcf differential. That would be VERY BULLISH for natural gas prices.
Unless there is a major change in the North American weather pattern, which I am not seeing forecast anywhere, there should be strong support for gas prices well into next spring.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Dec. 5
From one of the many analysts' reports I get:
Natural Gas Summary and Outlook
Price Action: Prices rose 16.0 cents (4.0%) to $4.114 on an expanded 30.2 cent range.
Price Outlook: Prices continued higher with the market up now for the 4th consecutive week. Considering the weak close, uncertainty at the back end of the weather forecast and the extended price up move, a rare inside week is considered possible. Five consecutive weeks higher would mark the 17th time that the market ended with exactly that 5 week string. Since 2000, 35 weeks have seen exactly 4 weeks higher. The record consecutive streak higher was 14 in 2008. The CFTC speculative position soared last week in accordance with the price uptick and clearly reveals the momentum trend following algorithms that drive many trading decisions. Although the last two weeks represent a significant increase, the current speculative net long position remains at less than half the historical peak and thus further buying could lead prices even higher. Total combined open interest has actually fallen and stands at just 4.54 million across the complex as of December 3. CME futures open interest increased to 1.31 million contracts as of December 5.
Weekly Storage: US working gas storage for the week ending November 29 indicated a weekly withdrawal of 162 bcf. Thus, current inventories of 3,614 bcf fall 190 bcf (5.0%) below last year and 113 bcf (3.0%) behind the 5 year average.
Storage Outlook: The large Producing Region withdrawal highlights what we believe will be increasingly volatile storage changes as withdrawals near the 300 bcf level are possible on extended cold in the South while injections near 125 bcf are possible with moderate temperatures. The yearly storage deficit could easily exceed 500 bcf by year’s end. This week’s storage withdrawal of 162 bcf was mathematically smaller, i.e. larger withdrawal, than expected and exceeded all the reported estimates with some matching our own 154 bcf expectation. The larger than expected withdrawal highlights the non-linear nature of R&C demand along with the demographic shift to the south. In general, Southerners laugh at 95 and cower at 35.
Supply Trends: Total supply rose 0.6 bcf/d to 71.0 bcf/d. Surging Canadian imports offset lower US production. LNG imports and Mexican exports were both marginally higher. The US Baker Hughes rig count rose 12 with both oil and natural gas activity higher. Canadian activity increased 17. Thus the total North American rig count rose by 29 to 2,177 and trails last year by 29. The higher efficiency US horizontal rig count rose 10 to 1,137 and rises 34 above last year.
Demand Trends: Total demand soared 21.7 bcf/d to 92.5 bcf/d. All demand sectors were higher with R&C leading the increase. Electricity demand increased 5,049 gigawatt-hrs to 77,368, which exceeds last year by 3,809 (5.2%) and the 5 year average by 5,129 (7.1%). Temperature adjusted remains very bullish with the non-linear R&C sector especially sensitive to lower temperatures.
Other Factors: The S&P 500 rallied strongly on the heels of a positive US jobs report. It remained slightly below the all-time record high
Natural Gas Summary and Outlook
Price Action: Prices rose 16.0 cents (4.0%) to $4.114 on an expanded 30.2 cent range.
Price Outlook: Prices continued higher with the market up now for the 4th consecutive week. Considering the weak close, uncertainty at the back end of the weather forecast and the extended price up move, a rare inside week is considered possible. Five consecutive weeks higher would mark the 17th time that the market ended with exactly that 5 week string. Since 2000, 35 weeks have seen exactly 4 weeks higher. The record consecutive streak higher was 14 in 2008. The CFTC speculative position soared last week in accordance with the price uptick and clearly reveals the momentum trend following algorithms that drive many trading decisions. Although the last two weeks represent a significant increase, the current speculative net long position remains at less than half the historical peak and thus further buying could lead prices even higher. Total combined open interest has actually fallen and stands at just 4.54 million across the complex as of December 3. CME futures open interest increased to 1.31 million contracts as of December 5.
Weekly Storage: US working gas storage for the week ending November 29 indicated a weekly withdrawal of 162 bcf. Thus, current inventories of 3,614 bcf fall 190 bcf (5.0%) below last year and 113 bcf (3.0%) behind the 5 year average.
Storage Outlook: The large Producing Region withdrawal highlights what we believe will be increasingly volatile storage changes as withdrawals near the 300 bcf level are possible on extended cold in the South while injections near 125 bcf are possible with moderate temperatures. The yearly storage deficit could easily exceed 500 bcf by year’s end. This week’s storage withdrawal of 162 bcf was mathematically smaller, i.e. larger withdrawal, than expected and exceeded all the reported estimates with some matching our own 154 bcf expectation. The larger than expected withdrawal highlights the non-linear nature of R&C demand along with the demographic shift to the south. In general, Southerners laugh at 95 and cower at 35.
Supply Trends: Total supply rose 0.6 bcf/d to 71.0 bcf/d. Surging Canadian imports offset lower US production. LNG imports and Mexican exports were both marginally higher. The US Baker Hughes rig count rose 12 with both oil and natural gas activity higher. Canadian activity increased 17. Thus the total North American rig count rose by 29 to 2,177 and trails last year by 29. The higher efficiency US horizontal rig count rose 10 to 1,137 and rises 34 above last year.
Demand Trends: Total demand soared 21.7 bcf/d to 92.5 bcf/d. All demand sectors were higher with R&C leading the increase. Electricity demand increased 5,049 gigawatt-hrs to 77,368, which exceeds last year by 3,809 (5.2%) and the 5 year average by 5,129 (7.1%). Temperature adjusted remains very bullish with the non-linear R&C sector especially sensitive to lower temperatures.
Other Factors: The S&P 500 rallied strongly on the heels of a positive US jobs report. It remained slightly below the all-time record high
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Dec. 5
The winter spike in natural gas continued today as prices gained another $0.10, or 2.36 percent, to $4.34/mmbtu—a 7-month high.
Thursday's inventory report from the EIA may show that operators withdrew 84 billion cubic feet from storage last week, according to a survey of analysts by Bloomberg.
Thursday's inventory report from the EIA may show that operators withdrew 84 billion cubic feet from storage last week, according to a survey of analysts by Bloomberg.
Re: Natural Gas Storage Report - Dec. 5
I will be shocked if we don't see a triple digit draw tomorrow.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
bearcatbob
Re: Natural Gas Storage Report - Dec. 5
From a NE Ohio view next week's draw will be the boomer. Early last week here was not overly cold. The cold was out west. My understanding is that Ohio in one of the big users. This week the furnaces are firing on all burners.dan_s wrote:I will be shocked if we don't see a triple digit draw tomorrow.
ROBRY is at ~85.
http://investorvillage.com/smbd.asp?mb= ... d=13371745
Bob
Re: Natural Gas Storage Report - Dec. 5
dan, recall the severe cold happened late in the week last week..
Re: Natural Gas Storage Report - Dec. 5
I did see one forecast that next week's report could show a draw near 300 bcf. That would send a shock through this market.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group