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- The month of August adds 4.8 cents to establish at $ 2,769; Bespoke
- 1Q2019 Nymex's prices could average $ 3.40 on low-salt storage stocks: BofA
- SoCal Citygate spikes up 4.7 cents to $ 2,736
- 4 , $ 29 / day to $ 13.36 under heat, stresses
Not really an alarm clock, but government data on storage showed an injection well below expectations Thursday, shaking the natural gas futures market and causing a rebound. During at least one session
In the spot market, high temperatures and increased demand for gas – fired electricity generation have prolonged the eruption of prices this week at SoCal Citygate; With disappointing forecasts that drove down prices in the Midwest and East, the National Spot Gas Average slid 2 cents to $ 2.68 / MMBtu
. August Nymex rose 4.8 cents to $ 2,769 as $ 2,7776. September: 4.7 cents to settle at $ 2,736
A bullish surprise from the weekly report on the natural gas inventory released by the Energy Information Administration (EIA) on Thursday reminded us that even though production growth dominated
EIA reported a 46 billion cubic foot injection into Lower 48 gas stocks for the week ended July 13, or about 10 billion feet of less than consensus estimates based on large surveys. Construction also fell below the average injection of 62 bcf over five years. Last year, EIA recorded a construction of 31 Bcf for the period
With Thursday's report marking the second consecutive week that the injections were well above the average of the last five years, the bearers due to the burgeoning production – seemed to concede that they had gone too far given the risks posed by large inventory deficits.
The issue, released at 10:30 am ET, immediately triggered a recovery for the fast month, with explosive prices At 11:30 pm ET, the August contract was trading around $ 2,770, up of about a nickel compared to the liquidation of Wednesday and near the end of the session
. the report, surveys showed that the market was looking for a construction closer to 55 billion cubic feet. A Bloomberg survey of traders and badysts revealed a median production of 56 billion cubic feet, with a range of 44 to 65 billion cubic feet. The EDI Financial Weekly Index of the Intercontinental Exchange arranged Wednesday at 54 billion Fc.
"This EIA was tight enough to allow us to see more and more natural gas prices … and so the $ 2.80 level on Wednesday seems all the more up for grabs in the near term. , as it is likely tested after the bullish inversion candle today, "Bespoke Weather Services told customers Thursday.
Still, Bespoke pointed to the weakness along the winter strip The market has doubts about the EIA's tight report, suggesting that it might not have much of an interest in getting rally more.
"It's hard to determine if this week's EIA misses a factor," Bespoke said. "Production may be overestimated, burn / demand oppression may be underestimated and / or the impact of the July 4 holiday may have been underestimated. Whatever the reason, the natural gas market is tighter than expected, and we would need to see material evidence of this looseness so we do not expect to find more and more winter prices ( or at least see a very limited inconvenience).
Total working gas in underground storage was 2.249 billion cubic feet on July 13, compared to 2 959 billion cubic feet last year and five-year average stocks of 2 784 billion cubic feet, according to EIA. Week by week, the annual deficit has shrunk from 725 billion cubic feet to 710 billion cubic feet, while the five-year annual deficit has risen from 519 billion cubic feet to 535 billion cubic feet, according to EIE data
. period included net withdrawals in the South Central and Pacific regions. In the center-south, a traction of 8 Bcf of compensated salt of 3 Bcf is filled in non-salt for the week, according to EIA. The Pacific saw a withdrawal of 1 Bcf. The eastern and midwestern regions saw the bulk of the week's injections at 27 billion cubic feet and 24 billion cubic feet respectively. In the Mountain area, 1 billion cubic feet was injected
Given low stocks of fast-cycling salt storage in the winter, natural gas prices are expected to rise to 3, $ 40 for 1T2019, according to a BofA Merrill Lynch Global Research report released Thursday. The company's forecast would mean a sharp increase over the current winter band, with the January deal not exceeding $ 3.00 on Thursday.
"A weak inventory environment, particularly the salt component, could lead to a rise in Nymex natural gas prices and increased volatility this winter season," BofA badysts wrote. only three weeks of cold in December 2017 and in January 2018, salt stocks have dropped to unsustainable levels. Then, a brief month of February 2018 happily solved the problem of salt stocks by destroying nearly 150 Bcf of natural gas demand
"We now expect salt stocks to enter unsustainable levels this winter." "Even under normal weather conditions, we observe a risk of salt storage in natural gas, below the levels observed during the first quarter of the year. Thus, the trajectory of low-salt stocks drives our forecast of short term price of $ 3.15 for 4T2018 and $ 3.40 for 1T2019.
That being said, growth in production could limit any winter rally. Increases "likely to overwhelm demand growth from liquefied natural gas exports, Mexican exports and industrial sector, badysts said." We expect market balance to release higher than normal total inventories by the end of 2019, which will put the market at risk of congestion in 2020. In addition to the fundamentals of supply and demand, we expect that coverage flows "We see a potential for significant coverage of renewable energy projects as well as natural gas producers. Our new average price forecast of $ 2.55 in 2020, down from 2.75 previously, reflects these longer-term bearish fundamentals and hedge flows.
The spot market experienced a slight increase in demand and infrastructure constraints. SoCal Citygate spot prices Thursday, as the location followed on Wednesday $ 1.60 a day / day jump by increasing another $ 4.29 on average $ 13.36.
Southern California Gas Utilities Co. (SoCalGas) and San Diego Gas & Electric Co. released a system-wide discount watch on Thursday. "High temperatures throughout the region have increased the demand for natural gas power generation," said the utilities. "High temperatures should continue throughout the weekend and until next week."
Radiant Solutions forecast highs in the 80s and 90s in the next two days in Burbank, California, with highs expected to reach the 90s Monday,
SoCalGas reported actual system shipments for Wednesday again of 3 million Dth / d, about 300 000-400 000 Dth / d more than it had estimated a day earlier. With a total reception capacity capped at around 2.6 million Dth / d, SoCalGas has announced a net storage withdrawal for Wednesday of 465,000 Dth / d. This stems from the fact that the public service only limited the use of its Aliso Canyon facility as a result of a leak in 2015 that sparked a public outcry and a regulatory review.
SoCalGas predicted that demand would remain at 2.8-3 million Dth / d until the end of the week.
Complicating things for a newly-functioning market, SoCalGas on Friday announced an unplanned maintenance that would require upgrades to its L5000 pipeline, reducing capacity at El Paso-Ehrenburg and North Baja. Pipeline-Blythe locations per 260 MMcf / d.
SoCal Border Average fell 13 cents to $ 3.73 on Thursday. Further upstream El Paso S. Mainline / N. Baja dropped 43 cents to $ 4.00, while Kern Delivery lost 99 cents to $ 3.58.
In the Midwest and East, prices fell under the effect of cooler temperatures over the next few days. Radiant claimed highs in Chicago in the mid-70s over the weekend, with highs in New York City expected to fall to 80 on Saturday.
Joliet dropped 5 cents to $ 2.58, while Transco Zone 6 New York paid 6 cents to $ 2.77
Prices fell in most of Texas on Thursday, although forecasts were announcing very dismal temperatures from Dallas to north Texas to Houston on the coast to close the week. Dallas was expecting to see the highs rise to 110 degrees Saturday, with average temperatures of about 10.5 degrees warmer than normal, according to Radiant. The firm was asking Houston to reach a record high of 101 degrees on Saturday.
The heat of this week has established a new peak energy demand record for the Electric Reliability Council of Texas (ERCOT). On Wednesday afternoon, the record reached 71 "438 MW, exceeding the previous record of 71,110 MW set on August 11, 2016.
" Texans continue to face extreme heat throughout the state while ERCOT and the electricity suppliers work diligently to ensure the power they need to stay cool, "said the network operator. "We plan to continue to break new demand records in the summer of 2018".
This perspective is reflected in an badysis of Morningstar Commodities Research published before the announcement of ERCOT
Houston Ship Channel fell $ 2.84 Tres Palacios sold 5 cents to $ 2.73
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