Executive Market Summary

August 28th, 2014

Executive Market Summary

CLICK HERE TO DOWNLOAD

August has been a relatively mild month across most of the central and eastern US. We are quickly approaching September and forecasts indicate cooler-than-normal temperatures for most of the north-central US. WSI predicts this same pattern for a majority of the fall and indicates that the data needed to make a successful winter forecast is not yet available. The first official winter forecast will be available in September.

The natural gas injection was 75 Bcf, below expectations of 76 Bcf, causing prices to rise briefly immediately following the report. Some analysts predicted up to a 78 – 80 Bcf injection. 2014 has been the strongest injection season in the past six years but storage still remains 15.7% below the levels last year.

High production numbers have assisted in reducing the storage deficit due to extreme weather by more than 50% since the beginning of injection season. Forecasts indicate strong injection numbers will continue and the EIA predicts storage to sit at 3,460 Bcf by the end of injection season (October 31).

Read More



August 22nd, 2014

Executive Market Summary

CLICK HERE TO DOWNLOAD

 

Overall mild weather this summer has helped US natural gas production achieve record levels, curtail natural gas demand in the power sector and support large, ongoing natural gas injections.

Gas production continues to break records. US dry natural gas production hit a high of 69.3 Bcf on July 30 and reached the same level again a few times this month.

NOAA is predicting that weather will remain mild in the Midwest and Northeast portions of the United States. The Southern part of the nation and California area can expect above normal temperatures through the end of the month.

Weather

This report week’s injection was 88 Bcf – surpassing the expectation of 82 Bcf as well as last year’s 58 Bcf build and the 5-year average build of 48 Bcf. This was the 18th straight injection beating the 5-year average injections. Again, the mild weather is helping support the large injections we continue seeing each week. Bentek Energy’s injection forecast for the next three weeks is 87, 82 and 76 Bcf.

Read More



August 15th, 2014

Executive Market Summary

Click Here To DOwnload!

According to the National Oceanic and Atmospheric Administration, above normal temperatures are expected for the eastern half of the United States through next week. Temperatures in the Midwest are expected to remain normal to above normal in most areas. CenterPoint Energy also noted that forecasts are predicting the last half of August to be warmer than what was anticipated originally.

Due to the lack of cooling demand overall consumption decreased by 0.2%. The largest decline in power burn was in the Midwest, at 27.6%. Supply continues increasing due to record production numbers. The EIA released an updated Short Term Energy Outlook and expects production in 2014 to grow by 5.3% compared to last year. Above weekly storage injections have raised the projected end of injection season inventory to 3,460 Bcf.

Storage still stands 17.7% less than it did last year despite the record injections we continue seeing each week. Though the projected end of injection season inventory was raised, it still stands below the five-year average peak storage value of 3,851 Bcf. In order to reach the five-year peak weekly injections would need to average 114 Bcf/week. So, until the storage gap is filled it remains a bullish factor.

Read More



August 8th, 2014

Executive Market Summary

Click here to download!

 

For the most part, weather continues to be moderately cooler than average. As stated last week, forecasts predict August 2014 to be about 1.3% cooler than August 2013. Overall temperatures are expected to be relatively normal this coming week but a cold front is estimated to hit the Eastern United States later in the week.

The reduced weather-related demand will allow inventories to continue refilling at a rapid pace and keep natural gas usage at power plants low. Natural gas consumption for power generation fell 3% and total consumption fell by 2.6% this week.

This report week’s injection was about 2 Bcf lower than what forecasters expected. The 82 Bcf injection was also the first time in 12 weeks there was a smaller weekly build than last year and the year-on-year defecit increased from 530 to 538 Bcf. Early forecasts for next week indicate an injection well above last year’s rate.

Read More



August 1st, 2014

Executive Market Summary

Click Here to Download!

 

This June was moderately warm across the US and July was significantly cooler overall – especially across the central regions of the country. Cooler temperatures are generally a result of emerging El Nino events and WSI’s chief meteorologist Todd Crawford believes that the progression toward El Nino conditions is continuing. Below-normal temperatures will be prevalent from the northern/central Rockies eastward with above normal temperatures expected in the Pacific Northwest and Southeast for the remainder of summer.

Mild temperatures August and September will decrease weather-related demand and should allow natural gas inventories to continue refilling rapidly – decreasing the deficit to last year’s level.  Chris Kostas, a Senior Power and Gas Analyst at ESAI, expects energy demand to soften considerably in October due to the seasonal temperature change. A soft demand is expected to help the natural-gas injection season finish very strong.

This report week’s storage injection fell short of expectations and caused about an eight cent bump in the market. The 88 Bcf injection was still well above last year’s injection of 57 Bcf. Fourteen weeks remain in the injection season and the EIA expects inventory levels to reach 3,431 by October 31.

Read More



July 25th, 2014

Executive Market Summary

CLICK HERE TO DOWNLOAD!

This report week’s 90 Bcf injection was larger than last year’s 43 Bcf injection and the five year injection average for the same week of 47 Bcf but it still did not meet expectations. Forecasts anticipated a 95-96 Bcf build and upon release of the report, the August natural gas futures contract increased 4 cents.

Net storage injections have totaled 1,397 since April 4 versus 1,080 Bcf for the same 16 weeks in 2013. These above average injections are a great help in making up for the deficit we created this winter.

Natural gas consumption decreased for the week mainly due to weather. Temperatures fell below normal for much of the eastern half of the United States. Mild temperatures are expected to continue for the next two weeks according to several sources, including John Kilduff, a partner at Again Capital LLC, a NY based hedge fund focusing on energy.

Production continues increasing overall – dry production hit a record high on Monday at 69.1 Bcf, according to the EIA. Genscape, a provider of real-time data and intelligence for commodity and energy markets, reports that dry production reached 70 Bcf for the first time Monday.

Read More



July 18th, 2014

Executive Market Summary

Click Here to Download!

Natural gas storage injections continue increasing at a record pace. This week’s injection was 107 Bcf, exceeding expectations of 100 Bcf. This is the eighth out of nine consecutive weeks storage has come in at or above 100 Bcf. From the week ending on April 4 through the week ending on July 11, net storage injections have totaled 1,307 Bcf, versus 1,037 Bcf for the same 15 weeks in 2013 (EIA).

Cooler temperatures this week have also had a bearish effect on the market. A cold air mass came down from the arctic and dropped temperatures across the nation – mainly in the Midwest. Patrick Badgley, Platts’ North American natural gas editor, points out that because most of the country has experienced a mild summer – gas prices are taking a hit.

Storage remains 608 Bcf below last year’s levels and overall consumption rose this week by 1.9%. The cooler weather caused residential and commercial demand to increase slightly. Power burn also increased by 3.7% compared to last week.

Read More



July 11th, 2014

Executive Market Summary

CLICK HERE TO DOWNLOAD!

 

Natural gas futures hit a six-month low yesterday. According to Tim Alford with Armored Wolf, price spikes are not expected to be as large or sustained as long because of the increase in production.  Record production continues to offset the natural gas storage deficit but even with the record injections, storage remains more than 20% less than last year’s levels.

For the first time in 8 straight weeks, the natural gas injection came in below 100 Bcf at 93 Bcf. Forecasts were calling for a 87 Bcf build which is more than last year’s 81 Bcf build and larger again than the five year injection average of 72 Bcf.

Total natural gas consumption fell this week by 1.5 Bcf/day thanks to a 1.6 Bcf/day decrease in power burn. Temperatures in the Northeast, Midwest and Southwest registered cooler temperatures which helped account for the decline.

There are 17 more weeks in the injection season which ends October 31. The EIA increased their forecast for end of October levels from 3,424 Bcf to 3,431 Bcf.

Read More



July 3rd, 2014

Executive Market Summary

CLICK HERE TO DOWNLOAD!

Natural gas storage injections continue for the eighth week at or above 100 Bcf. This week’s 100 Bcf injection was above last year’s 75 Bcf injection and the five year injection average of 68 Bcf but failed to meet the forecasted predictions of 102 Bcf.

The demand for natural gas is in July expected to be lower than normal due to cooler temperatures. For more information on the weather, please see below.

Natural gas supply and production both increased overall. Supply increased at 0.1 Bcf/day for the third week in a row, landing at 73.4 Bcf/day. Total dry production also increased for the third week in a row by 0.1 Bcf/day.

Weather is a neutral market driver mainly because of the start of summer weather and uncertainty around the El Nino event. An El Nino event is correlated with cooler than normal temperatures and a suppressed hurricane season. WSI predicts below normal temperatures July through September for the north-central and northeastern United States. Warmer than normal temperatures are expected in the southeast, but if the El Nino occurs it has the potential to cool down that region of the US.

Please note the natural gas market closed at noon today in anticipation for the Independence Day holiday. Have a great weekend!

Read More



June 27th, 2014

Executive Market Summary

CLICK HERE TO DOWNLOAD

Weather Services International (WSI) expects no change to the quiet tropical season. This year may likely be the first since 2009 we go into July without one named storm. Regarding temperatures, WSI still expects below normal temperatures across the north-central and northeastern states. Above normal temperatures are expected in the Southeast US and western states. Click image below for the most recent forecast for July – September.

Natural gas storage increased by triple digits for the seventh consecutive week. The injection was 110 Bcf, above the expectations of approximately 104 Bcf. This injection was larger than the 81 Bcf 5-year injection average and larger than last year’s injection of 94 Bcf.

Chris Kostas, with Energy Security Analysis, Inc. (ESAI), predicts natural gas demand in July will be below average due to the cooler-than-normal temperatures expected over most of the country. This should result in relatively soft energy prices – particularly for the Northeast and Midwest markets.

Natural gas production is increasing in the three major tight oil production areas. The Eagle Ford, Permian Basin and Bakken Shale are partially responsible for natural gas production increasing by 5% overall so far in 2014. Since 2011, gas production in these three regions increased by 88%. Natural gas production hit a record high of 68.5 Bcf on Saturday.

Natural gas storage remains low compared to the one and five year averages but the 100+ Bcf builds are helping decrease the deficit. Overall natural gas demand surpassed production. Consumption rose 1.8%- driven by increases in the industrial and power burn sectors.

Read More