Natural Gas
Posted: Tue Oct 17, 2017 10:18 am
Working gas in storage was 3,595 Bcf as of Friday, October 6, 2017, according to EIA estimates. This represents a net increase of 87 Bcf from the previous week. Stocks were 153 Bcf less than last year at this time and 8 Bcf below the five-year average of 3,603 Bcf.
EIA will report five more weeks of storage builds before the winter heating season begins in mid-November.
At 3,595 Bcf on 10/6, storage is 282 Bcf below the 5-year average storage level (3,877 Bcf) when the winter heating season begins. Because the eastern half of the U.S. is turning colder, my guess is that storage will be below the 5-year average when real winter heating season arrives. This week's storage report s/b the last large build in storage.
There is a BIG CHANGE in the global weather pattern about to occur and it looks like a COLD START to winter in the northern half of the U.S.
See: https://www.weatherbell.com/premium/
Unlike oil, natural gas trades on regional markets. The North American gas market is driven by the weather, which has a HUGE impact on demand for space heating and for electric power generation. If the weather is close to what happened at the end of 2013, we should see a big spike in gas demand and a big spike in the gas price in December. In December, 2013 the NYMEX futures contract spiked to over $6.00/MMBtu because there was a 462 Bcf decline in natural gas storage levels during the two weeks that ended December 20, 2013.
What's interesting now is that the weather forecast for the last week of October show some very cold air moving into the Great Lakes Region. The first big snow event may happen by Halloween. Remember, the states that consume the most natural gas for space heating are Illinois, Michigan, Ohio, Minn and Wis.
EIA will report five more weeks of storage builds before the winter heating season begins in mid-November.
At 3,595 Bcf on 10/6, storage is 282 Bcf below the 5-year average storage level (3,877 Bcf) when the winter heating season begins. Because the eastern half of the U.S. is turning colder, my guess is that storage will be below the 5-year average when real winter heating season arrives. This week's storage report s/b the last large build in storage.
There is a BIG CHANGE in the global weather pattern about to occur and it looks like a COLD START to winter in the northern half of the U.S.
See: https://www.weatherbell.com/premium/
Unlike oil, natural gas trades on regional markets. The North American gas market is driven by the weather, which has a HUGE impact on demand for space heating and for electric power generation. If the weather is close to what happened at the end of 2013, we should see a big spike in gas demand and a big spike in the gas price in December. In December, 2013 the NYMEX futures contract spiked to over $6.00/MMBtu because there was a 462 Bcf decline in natural gas storage levels during the two weeks that ended December 20, 2013.
What's interesting now is that the weather forecast for the last week of October show some very cold air moving into the Great Lakes Region. The first big snow event may happen by Halloween. Remember, the states that consume the most natural gas for space heating are Illinois, Michigan, Ohio, Minn and Wis.