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Energy News and Market Information for the week of 08/31/2015


Market News

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Data Highlights

 

WTI crude oil futures

9/3/2015: $46.75/bbl
up$4.19 from week earlier
down$48.79 from year earlier

Natural gas futures

9/3/2015: $2.725/mmBtu
up$0.087 from week earlier
down$1.122 from year earlier

Natural gas inventories

8/28/2015: 3,193 Bcf
up94 Bcf from week earlier
up495 Bcf from year earlier

Crude oil inventories

8/28/2015: 455.4 mmbbl
up4.7 mmbbl from week earlier
up95.9 mmbbl from year earlier

Weekly coal production

8/29/2015: 18.702 million tons
up0.247 million tons from week earlier
down0.888 million tons from year earlier

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Author: Jason Scarbrough

 

I WIN

A judge threw out the Tom Brady Deflate Gate case because Tom Brady is too  good looking to be punished.
-AP
 


Natural Gas

What to expect next week  - nothing..

 
The September contract expired at $2.638/MMBtu last Thursday.

Warmer weather this week and next week are not likely to move the needle at all for nat gas.  End of injection season numbers and a mild winter due to a strong El Nino are weighing on the market and movement to the upside to any significance is unlikely for the near future.  

At this season’s pace, we will hit record storage of 1.297 Tcf in the GoM on the week ended October 02nd, and we figure the odds of hitting record storage by the end of the season narrowed to better than even money. Furthermore, we can test demonstrated working capacity of 1.503 Tcf on the week ended October 23rd, however the odds of this occurring are much wider, i.e. 8/1 or an 11% chance.
 
Note the Contango Spread continues to narrow – making long term deals a no brainer 

In addition you will see a very narrow range in the technical charts with small daily volume due to the extreme volatility in the other markets – namely crude and equities.  Simply put – no one is paying attention to nat gas right now. 

Keep in mind this isn’t to say that supply won’t be tested at some point in the foreseeable future – so look at this as an opportunity.
 

Crude/Equities 

The route isn’t over, $33 oil is a very real possibility (2009 low)


 
 


 
 
 

Technicals

Bearish



The overall trend to this market over the YTD is down.  There isn’t any fundamental reason for natty to rally and technicals have broken down even further after the breakout to the downside of the narrowing consolidation formation 14 sesions ago.

The market has continued to form another consolidation pattern (very Narrow) between ~$2.60 and ~2.70. as warm weather subsides and production ramps up – I think it is likely that the market tests the Aprlil lows of $2.44.

In addition – without any kind of deep freeze forecast – the market could see the front end of the curve dip further towards $2.00 before its rally for actual cold weather hitting as it seems to do every year now. 

 

 

Storage

Natural Gas Inventories currently stand at 3,193 BCF 
 

 
The EIA reported a net storage injection of 94 BCF this morning for the week ending August 28, 2015. This week’s report was above the market’s expectation which was centered around an injection of 91 BCF. It is bearish against 79 BCF injected in this same week last year and against the five year average injection for this week of 60 BCF. 

Natural gas continues to bump along near the bottom of summer trading range as a well-supplied market has kept a firm lid on pricing.



Natural gas inventories currently stand at 3,193 BCF which is 495 BCF greater than from this same week last year and 122 BCF greater than the five year average.