To put a fine point on article below: If you can predict the weather, weeks/months in advance? You can predict NG prices. Translation.... Don't accept magical price forecasting claims.
Look instead at the hard science of
1, Grand Solar Minimum.
2. Continuing very LT decline in earths magnetic field.
3. Increasing very LT increase in cloud cover reflecting away solar radiation
4. Continuing NG production & drilling decline in 2021.
Isopatch
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In the meantime, latest ST news is:
<Natural Gas Loses 6.7% in One Week: Here's What Happened
Nilanjan Choudhury
December 28, 2020
The U.S. Energy Department's weekly inventory release showed a lower-than-expected decrease in natural gas supplies. This bearish withdrawal, coupled with unfavorable weather predictions, meant that the U.S. benchmark lost nearly 7% last week.
Let us see how the natural gas situation looks like after the U.S. Energy Department's latest weekly inventory release:
EIA Reports a Withdrawal Smaller Than Market Expectations.
Stockpiles held in underground storage in the lower 48 states fell by 152 billion cubic feet (Bcf) for the week ended Dec 18 compared to the guidance (of a 154 Bcf decline). However, the decrease was above the five-year (2015-2019) average net shrinkage of 127 Bcf and last year’s drop of 146 Bcf for the reported week.
The latest official data puts total natural gas stocks at 3.574 trillion cubic feet (Tcf), which is 278 Bcf (8.4%) above the 2019 levels at this time and 218 Bcf (6.5%) higher than the five-year average.
Total supply of natural gas averaged 95.7 Bcf per day, essentially unchanged on a weekly basis as higher dry production was offset by lower shipments from Canada.
Daily consumption — at 112.2 Bcf — remained flat too, with an increase in residential/commercial gas usage offset by a dip in power demand.
Natural Gas Price Drifts Lower.
Natural gas prices fell last week following the lower-than-expected inventory draw. Futures for January delivery ended Christmas Eve at $2.5180 per MMBtu on the New York Mercantile Exchange, down 6.7% from the same time previous week. The decrease in the price of natural gas is also the result of forecast models, indicating warmer-than-normal weather in the days ahead, which translates into smaller draws due to less use of heaters.
Wrap-Up.
As is the norm with natural gas, changes in temperature and weather forecasts can lead to price swings. With the latest models showing bearish changes toward a less chiller outlook, prices are expected to trend lower. As it is, with stockpiles still bloated, downside risks would continue to outweigh the upside potential unless the weather pattern flips significantly to colder for natural gas usage to rise. While growing LNG exports and lower production are providing some support for a price recovery, it will be the magnitude of the cold across the United States that will dictate the energy commodity’s future.>
Natural Gas Loses 6.7% in One Week: Here's What Happened - December 28, 2020 - Zacks.com |
