U.S. Natural Gas Market
Posted: Tue Feb 01, 2022 10:29 am
Notes below are from the Natural Gas Intelligence (NGI) website:
The market “is focusing on intensifying cold anomalies for Texas later this week and the risk of widespread production freeze-offs causing significant market disruptions,” EBW Analytics Group senior analyst Eli Rubin said.
“Anything approaching the scale of last year’s February fiasco remains unlikely” – given temperatures are forecast to be 5-15 degrees warmer than Winter Storm Uri even in the American weather model, which showed more cold than its European counterpart, Rubin added. However, “it is possible prices may not relent until mid-February after freeze-off fears and extended mid-winter cold pass.”
Bespoke Weather Services said temperatures were not projected to approach what Texas endured amid Uri, but conditions nevertheless would be plenty cold Wednesday and Thursday to force production pauses as heating demand intensifies in Texas and other southern states.
Along with the Texas freeze, Bespoke said the market is increasingly concerned about the impact on storage from sustained colder conditions. Below-normal temperatures permeated the central and eastern United States for most of January.
Given “how long this colder pattern has held,” the market appears to be noticing “the impact on storage, not just from the demand side but due to how long production has been held in check via freeze-offs, which will increase late this week,” Bespoke said. “Volatility will remain high, so expect some wild swings, but until it warms, it is tough to argue for much lower prices.”
The American model on Monday “maintains a pattern more favorable for continued cold beyond day 15” compared to its European counterpart, though “none of the modeling shows a pattern that looks poised to flip warm,” the firm said.
Demand for exports of U.S. liquefied natural gas (LNG) is also holding strong because of dwindling supplies across Europe. LNG feed gas volumes held above 12 Bcf on Monday.
Will Gas Storage Draw Surge?
Against that backdrop, Bespoke estimated a 280 Bcf withdrawal for this Thursday’s U.S. Energy Information Administration (EIA) storage report, which covers the week ended Jan. 28. If even close to that estimate, it would mark the biggest of the winter season and the third-straight pull above 200 Bcf. Bespoke expects more withdrawals in excess of 200 Bcf with each of the following two EIA reports. < This will push U.S. natural gas in storage to fall over 100 Bcf below the 5-year average on Feb 4.
Analysts at The Schork Report projected a pull of 282 Bcf. It would be the first time since 2014 that EIA reported three consecutive draws greater than 200 Bcf, they said.
NGI’s machine learning model called for a withdrawal of 286 Bcf with the next EIA report. If realized, such a print would fall well to the bullish side of both the year-earlier 183 Bcf withdrawal and the five-year average pull of 150 Bcf.
EIA reported a withdrawal of 219 Bcf natural gas from storage for the week ended Jan. 21. It was the biggest pull of the season to date and easily surpassed the averages of recent history. The agency recorded a total 137 Bcf withdrawal from storage in the similar week, while the five-year average draw was 161 Bcf.
The pull also flipped inventories from a surplus of 33 Bcf relative to the five-year average to a deficit of 25 Bcf. The draw left inventories at 2,591 Bcf.
Cash Clunks In Storm’s Wake
Spot gas prices dropped on Monday in the wake of the powerful storm that tracked across the East over the weekend.
Steep declines in the Northeast — where prices had soared ahead of the storm — led the national average lower. Transco Zone 6 NY fell $13.390 from Friday to average $6.245. Algonquin Citygate near Boston declined $5.275 to a still lofty $22.655.
Elsewhere in the East, Columbia Gas shed 38.0 cents to $4.940, and Millennium East Pool lost 18.5 cents to $5.215.
Prices in most other regions declined as well, given mild weather expectations on Tuesday. Chicago Citygate declined 3.5 cents to $5.080 and El Paso Permian fell 5.5 cents to $4.775.
Looking ahead, NatGasWeather expects a brief break from the cold on Tuesday before “a frigid Arctic blast sweeps across the Midwest, Plains and Northeast with lows of minus 20 to +20s, including lows of 10s to 30s deep into Texas and the South to aid strong national demand.” This is expected to begin Wednesday and continue through the trading week.
Next week, cold is projected to persist across the Midwest and East “as chilly systems bring rain, snow and lows ranging from subzero to the 30s,” NatGasWeather said.
Temperatures are then expected to moderate to seasonal norms in mid-February – cool but not bitterly cold in most regions, the firm added. “The western, central and southern U.S. will see a mix of chilly weather systems along with milder breaks, averaging out to near normal.”
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This is why I believe in "Climate the Same". No matter how many $Trillions are spent on human efforts to control the Earth's temperature, the efforts will fail. FEAR will be used to control and confuse populations as long as people keep listening to the talking heads. Do your own research.
The market “is focusing on intensifying cold anomalies for Texas later this week and the risk of widespread production freeze-offs causing significant market disruptions,” EBW Analytics Group senior analyst Eli Rubin said.
“Anything approaching the scale of last year’s February fiasco remains unlikely” – given temperatures are forecast to be 5-15 degrees warmer than Winter Storm Uri even in the American weather model, which showed more cold than its European counterpart, Rubin added. However, “it is possible prices may not relent until mid-February after freeze-off fears and extended mid-winter cold pass.”
Bespoke Weather Services said temperatures were not projected to approach what Texas endured amid Uri, but conditions nevertheless would be plenty cold Wednesday and Thursday to force production pauses as heating demand intensifies in Texas and other southern states.
Along with the Texas freeze, Bespoke said the market is increasingly concerned about the impact on storage from sustained colder conditions. Below-normal temperatures permeated the central and eastern United States for most of January.
Given “how long this colder pattern has held,” the market appears to be noticing “the impact on storage, not just from the demand side but due to how long production has been held in check via freeze-offs, which will increase late this week,” Bespoke said. “Volatility will remain high, so expect some wild swings, but until it warms, it is tough to argue for much lower prices.”
The American model on Monday “maintains a pattern more favorable for continued cold beyond day 15” compared to its European counterpart, though “none of the modeling shows a pattern that looks poised to flip warm,” the firm said.
Demand for exports of U.S. liquefied natural gas (LNG) is also holding strong because of dwindling supplies across Europe. LNG feed gas volumes held above 12 Bcf on Monday.
Will Gas Storage Draw Surge?
Against that backdrop, Bespoke estimated a 280 Bcf withdrawal for this Thursday’s U.S. Energy Information Administration (EIA) storage report, which covers the week ended Jan. 28. If even close to that estimate, it would mark the biggest of the winter season and the third-straight pull above 200 Bcf. Bespoke expects more withdrawals in excess of 200 Bcf with each of the following two EIA reports. < This will push U.S. natural gas in storage to fall over 100 Bcf below the 5-year average on Feb 4.
Analysts at The Schork Report projected a pull of 282 Bcf. It would be the first time since 2014 that EIA reported three consecutive draws greater than 200 Bcf, they said.
NGI’s machine learning model called for a withdrawal of 286 Bcf with the next EIA report. If realized, such a print would fall well to the bullish side of both the year-earlier 183 Bcf withdrawal and the five-year average pull of 150 Bcf.
EIA reported a withdrawal of 219 Bcf natural gas from storage for the week ended Jan. 21. It was the biggest pull of the season to date and easily surpassed the averages of recent history. The agency recorded a total 137 Bcf withdrawal from storage in the similar week, while the five-year average draw was 161 Bcf.
The pull also flipped inventories from a surplus of 33 Bcf relative to the five-year average to a deficit of 25 Bcf. The draw left inventories at 2,591 Bcf.
Cash Clunks In Storm’s Wake
Spot gas prices dropped on Monday in the wake of the powerful storm that tracked across the East over the weekend.
Steep declines in the Northeast — where prices had soared ahead of the storm — led the national average lower. Transco Zone 6 NY fell $13.390 from Friday to average $6.245. Algonquin Citygate near Boston declined $5.275 to a still lofty $22.655.
Elsewhere in the East, Columbia Gas shed 38.0 cents to $4.940, and Millennium East Pool lost 18.5 cents to $5.215.
Prices in most other regions declined as well, given mild weather expectations on Tuesday. Chicago Citygate declined 3.5 cents to $5.080 and El Paso Permian fell 5.5 cents to $4.775.
Looking ahead, NatGasWeather expects a brief break from the cold on Tuesday before “a frigid Arctic blast sweeps across the Midwest, Plains and Northeast with lows of minus 20 to +20s, including lows of 10s to 30s deep into Texas and the South to aid strong national demand.” This is expected to begin Wednesday and continue through the trading week.
Next week, cold is projected to persist across the Midwest and East “as chilly systems bring rain, snow and lows ranging from subzero to the 30s,” NatGasWeather said.
Temperatures are then expected to moderate to seasonal norms in mid-February – cool but not bitterly cold in most regions, the firm added. “The western, central and southern U.S. will see a mix of chilly weather systems along with milder breaks, averaging out to near normal.”
-----------------------
This is why I believe in "Climate the Same". No matter how many $Trillions are spent on human efforts to control the Earth's temperature, the efforts will fail. FEAR will be used to control and confuse populations as long as people keep listening to the talking heads. Do your own research.