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Editorial by Geoffrey Lakings for Industrial Info Resources (Sugar Land, Texas)--As one finds themselves in the Shoulder Period (April, May, June) for Natty, one has already witnessed some recovery in price--back to the $2.40 level here in mid-April--from when natty price found itself cratering back to lows below $2.00--with a thought we might be breaking out to the upside.
However, like that proverbial yo-yo as the market steps into May, the price finds itself falling back towards $2.00 once again...
...with reasons why such is the case being presented in the FXEmpire: Natural Gas Technical Analysis:
The natural gas markets have drifted slightly lower during the Thursday trading session, as we continue to reach to the $2.00 level. Ultimately, this is a market that is going to continue to struggle with the idea of demand, especially as we are heading into warmer months. The northern hemisphere is by far the biggest area of demand, and if the market is going to continue to be influenced by a lack of cold weather, then obviously the prices will drop. Typically, this time of year we get a little bit of negativity and a range in general. I think we are setting up between the $2.00 level on the bottom and the $3.00 level on the top.
Where NatGasWeather.com speaks not only to the prevailing weather patterns but also to how Inventories in the U.S. continue to weigh on price.
And inventories (storage) weighing heavily on price--not only Stateside but elsewhere in the world--is further supported by Greg Molnár of the IEA; who recently wrote in regards to global gas markets on LinkedIn: (Global) gas prices dropped by close to 70% since mid-December across all key gas markets amidst easing supply-demand fundamentals and high storage levels.
Going on to say that--even with events happening & unfolding throughout Europe--prices are still settling lower.
- FXEmpire: Natural Gas Consolidation Pattern Hints at Potential Bullish Breakout: ABCD pattern targets 2.58 as natural gas eyes larger resistance zone at 2.62. Natural gas triggers a bull trend continuation today of the developing short-term trend with a move above the prior swing high of 2.38. Unfortunately, the bullish enthusiasm was short lived as it quickly started selling off upon reaching 2.41 and is on track to close with a red candle.
However, like that proverbial yo-yo as the market steps into May, the price finds itself falling back towards $2.00 once again...
...with reasons why such is the case being presented in the FXEmpire: Natural Gas Technical Analysis:
The natural gas markets have drifted slightly lower during the Thursday trading session, as we continue to reach to the $2.00 level. Ultimately, this is a market that is going to continue to struggle with the idea of demand, especially as we are heading into warmer months. The northern hemisphere is by far the biggest area of demand, and if the market is going to continue to be influenced by a lack of cold weather, then obviously the prices will drop. Typically, this time of year we get a little bit of negativity and a range in general. I think we are setting up between the $2.00 level on the bottom and the $3.00 level on the top.
Where NatGasWeather.com speaks not only to the prevailing weather patterns but also to how Inventories in the U.S. continue to weigh on price.
- Thursday: For today's EIA storage report, survey averages suggest a build of +72-77 Bcf, larger than the 5-year average of +43 Bcf. It was cooler than normal over the West and N. Plains, while warmer than normal most elsewhere. We expect a build of +80-81 Bcf, aided by stronger week over week wind and solar energy generation.
And inventories (storage) weighing heavily on price--not only Stateside but elsewhere in the world--is further supported by Greg Molnár of the IEA; who recently wrote in regards to global gas markets on LinkedIn: (Global) gas prices dropped by close to 70% since mid-December across all key gas markets amidst easing supply-demand fundamentals and high storage levels.
Going on to say that--even with events happening & unfolding throughout Europe--prices are still settling lower.
- Greg Molnar writes: In Europe, TTF settled below the 40/MWh mark yesterday, for the first time since August 2022, despite the heavy outages in Norway.
- Reuters: Power outages hit Nordic electricity system: The Nordic electricity power system was disrupted early on Wednesday, and two Swedish nuclear power reactors were disconnected, Finnish grid operator Fingrid and its Swedish counterpart said.
Those two reactors were expected to resume full operations by late on Wednesday, according to operator Vattenfall.
"Due to the disruption, replacement production from the Nordic balancing power market was activated and the situation was stabilised," Fingrid said, adding that Sweden, Finland, Norway and eastern Denmark were affected.
- UpstreamOnline: Wave of UK strikes reaches North Sea energy operations: About 1,300 UK offshore workers launched a two-day strike on Monday, with BP, CNRI, EnQuest, Harbour, Ithaca, Shell, Taqa Bratani and TotalEnergies among the operators affected, according to the Scottish branch of Unite trade union.
Unite Scotland said the industrial action was impacting production due to the specialised work the union members undertake on offshore platforms and assets.
- Verisk AER: Arctic Oscillation and Polar Vortex Analysis and Forecasts:
The models are finally predicting the classical pattern that often follows a large polar vortex disruption in winter but this time in late April and early May with Greenland blocking with troughing in the Eastern US, Europe and East Asia predicted. This pattern favors widespread below normal temperatures across, Central and Eastern. Europe, East Asia and the Eastern U.S.
El Dorado Weather: Current Europe Temperatures
(Because the upside price expectations from these events are more than offset by) as Greg goes on to write about the strong LNG inflow (part of the overall European natural gas imports.)
(into Europe supported by Global LNG Exports hitting record highs.)
and very high (European--like mentioned earlier for the U.S.) storage levels continue to put downward pressure on prices.
- Think.ING: Commodities: Europe ends winter with comfortable gas storage
Meanwhile in Asia, Greg goes on to say, spot LNG prices are heading towards the lower end of the oil-index range, which could incentivize higher buying interest on the spot market, including from Chinese players.
- Yahoo.Finance.Reuters: GLOBAL LNG-Asian spot prices hold near 2-year low, demand still weak: Asian spot liquefied natural gas (LNG) prices held at their 22-month lows this week, as demand remained weak in key North Asian markets Japan, South Korea and China.
The average LNG price for June delivery into northeast Asia was $12 per million British thermal units (mmBtu), industry sources estimated.
"JKM prices remain range bound... supply and demand dynamics in the Far East remain weak, with end users on the offer in summer and a real dearth of demand," said Tobias Davis, head of LNG Asia at brokerage Tullett Prebon.
And Greg wraps up with "...this should give us cautious optimism ahead of the coming months, although it is too soon to set back and relax: adverse weather, unplanned outages and lower Russian piped gas flows could easily renew market tensions..."
Then inquiring, "What is your view? Where is the market heading? Do you see any upside risks? Or its downside only?"
Where I have gone on record with an earlier Global Gas Market Featured content article in March -- the Calm before the Storm? -- that I expect the market & its pricing to be influenced to the upside. Once of course we can get through the doldrums of this Shoulder season, that is.
So yes, the majority of the pundits looking at all of this "data being visualized" are not in the slightest surprised that all gas indexes--HH, TTF, JKM--are indeed way off from last Summer's highs. With the Hub back at the aforementioned $2.00 even. But I feel it is but a matter of time before we see $4.00+ HH pricing this Summer as Europe & Asia will seek to "snap up cargoes" for their Summer power burn as well as to store for next Winter. Leaving us pondering.
- That we still do not have a good handle on where China's inventories truly are. They seem healthy, but are they?
- And, as mentioned we know Stateside we had some of our highest Power Burn ever with unprecedented heat last Summer, do we really believe this will not be the case this summer?
- As it seems like Europe will deal with both heat & drought this Summer. Likely to drive their Power Burn.
Therefore, let IIR Energy's Dedicated Market Research place the world at your fingertips. Tomorrow's News Today. Ask us! We have answers!
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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD). - Yahoo.Finance.Reuters: GLOBAL LNG-Asian spot prices hold near 2-year low, demand still weak: Asian spot liquefied natural gas (LNG) prices held at their 22-month lows this week, as demand remained weak in key North Asian markets Japan, South Korea and China.
- Think.ING: Commodities: Europe ends winter with comfortable gas storage
