Energy Market Outlook

Transcription

1 Kyle Cooper, (713) , Week Ending February 15, 2019 Please contact me to review a joint RBN Energy daily publication detailing natural gas fundamentals. Price Action: The March contract rose 4.2 cents (1.6%) to $2.625 on a 20.1 cent range ($2.744/$2.543). Price Outlook: A bullish weather forecast lifted prices early in the week while a lower than expected EIA storage withdrawal and moderating forecasts pushed prices lower to end the week. The result was prices that posted both a new high and low. Of the 998 weeks since 2000, natural gas has witnessed 114 weeks where both a new high and low are posted. Only 94 weeks witnessed neither a new high nor low. The low to end the week was the 4 th consecutive week of a new weekly low. There have been 44 occurrences where prices posted a new low exactly 4 weeks in a row with 24 instances where the market posted exactly 5 consecutive weekly lows. For daily updated storage projections, subscribe to our joint publication with RBN Energy. CFTC data indicated a 1,641 contract increase in the managed money net long position as longs added and shorts added. Total open interest rose 10,764 to million as of January 22. Aggregated CME futures open interest fell to million as of February 15. The is the lowest open interest since December 28, The current weather forecast is now cooler than 9 of the last 10 years. Pipeline data indicates total flows to Cheniere s Sabine Pass export facility were at 3.3 bcf. Cove Point is net exporting 0.8 bcf. Corpus Christi is exporting bcf. Cameron is exporting bcf. Weekly Storage: US working gas storage for the week ending February 8 indicated a withdrawal of (78) bcf. Working gas inventories fell to 1,882 bcf. Current inventories fall (2)bcf (-0.1%) below last year and fall (349) bcf (-15.6%) below the 5-year average. Storage Outlook: The EIA weekly implied flow was 10 bcf from our EIA storage estimate. This week s storage returned outside our tolerance. The forecasts use a 10-year rolling temperature profile past the 15-day forecast. Our joint publication with RBN updates storage projections daily. Supply Trends: Total supply fell (1.3)bcf/d to 83.8 bcf/d. US production fell. Canadian imports fell. LNG imports fell. LNG exports fell. Mexican exports fell. The US Baker Hughes rig count rose +2. Oil activity increased +3. Natural gas activity decreased (1). The total US rig count now stands at 1,051.The Canadian rig count fell (16) to 224. Thus, the total North American rig count fell (14) to 1,275 and now trails last year by (18). The higher efficiency US horizontal rig count fell (8) to 915 and rises +76 above last year. Demand Trends: Total demand fell (25.1) bcf/d to bcf/d. Power demand fell. Industrial demand fell. Res/Comm demand fell. Electricity demand fell (6,805) gigawatt-hrs to 76,185 which trails last year by (3,260) (-4.1%) and trails the 5-year average by (3,162)(-4.0%%). Nuclear Generation: Nuclear generation fell (1,327)MW in the reference week to 93,527 MW. This is (1,156) MW lower than last year and +922 MW higher than the 5-year average. Recent output was at 92,853 MW. The heating season has begun. With a forecast through March 1 the 2018/19 total cooling index is at (2,442) compared to (2,154) for 2017/18, (1,898) for 2016/17, (1,974) for 2015/16, (2,372) for 2014/15, (2,589) for 2013/14, (2,298) for 2012/13 and (2,209) for 2011/12. Page 1 of 5

2 Jun-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 Jun-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 $/MMBtu CL/NG Ratio $13 $/MMBtu Ratio of NYMEX CL and NG NG $/MMBtu CL $/MMBtu $/MMBTU CL/NG Ratio 4.50 $ $ $ $ $ $ NYMEX Calendar Strips $3.30 NG Cal 2018 NG Cal 2019 NG Cal 2020 NG Cal 2021 $3.20 $3.10 $3.00 $2.90 $2.80 $2.70 $2.60 $2.50 Page 2 of 5

3 4-Jan 18-Jan 1-Feb 15-Feb 1-Mar 15-Mar 29-Mar 12-Apr 26-Apr 10-May 24-May 7-Jun 21-Jun 5-Jul 19-Jul 2-Aug 16-Aug 30-Aug 13-Sep 27-Sep 11-Oct 25-Oct 8-Nov 22-Nov 6-Dec 20-Dec 3-Jan BCF 4-Jan 18-Jan 1-Feb 15-Feb 1-Mar 15-Mar 29-Mar 12-Apr 26-Apr 10-May 24-May 7-Jun 21-Jun 5-Jul 19-Jul 2-Aug 16-Aug 30-Aug 13-Sep 27-Sep 11-Oct 25-Oct 8-Nov 22-Nov 6-Dec 20-Dec 3-Jan BCF 4,200 4,000 3, 3, 3,400 3,200 3,000 2, 2, 2,400 2,200 2,000 1, 1, 1,400 1,200 1,000 US Total Working Gas Storage - Source - EIA Yr Avg 5 Yr Avg Forecast Max Min 4,200 4,000 3, 3, 3,400 3,200 3,000 2, 2, 2,400 2,200 2,000 1, 1, 1,400 1,200 1,000 Canadian Working Gas Storage - Enerdata Yr Avg 5 Yr Max 5 Yr Min Page 3 of 5

4 bcf/d bcf/d 90 US Total Suppy Current Yr Ago 5 Yr Avg 5 Yr Max 5 Yr Min US Total Demand Current Yr Ago 5 Yr Avg 5 Yr Max 5 Yr Min Page 4 of 5

5 ADDITIONAL INFORMATION AVAILABLE UPON REQUEST This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any commodity, futures contract, equity, bond or option contract on any other financial asset. IAF Advisors does not provide investment, financial, tax, or other advice, nor does it operate as a broker-dealer. IAF Advisors does not recommend the purchase or sale of any particular security or securities. Although any statements of fact in this report have been obtained from and are based upon sources that IAF Advisors believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. IAF Advisors, its officers and/or employees, may at any time have a long and/or short position in any commodity, futures contract, equity, bond or option contract on any other financial asset mentioned in this report. All opinions and estimates included in this report constitute IAF Advisors judgment as of the date of this report and are subject to change without notice. There is always a risk of loss in futures trading IAF Advisors Page 5 of 5