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Trading natural gas futures


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Trading natural gas futures

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  #241 (permalink)
bob666s
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Short term outlook based on COT positions, EIA storage, CPI, is currently fairly bullish into the next month or 2. Though I'm pretty sure we probably didn't need any numbers to be bullish this winter, haha.


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  #242 (permalink)
 SMCJB 
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ron99 View Post
Sep 30 inventory was 826. Average increase in inventory for Oct the last 10 years is 22. With average Oct final 2021 inventory would be 848.

Sep 2021 saw a 76 increase which was higher than 2019's 53 and 2020's 43. Aug 2021 build was also higher than 2019 & 2020. So 2021 could even see higher than average increase.

You called it!

Per John Kemp :-

EU28 gas storage sites have increased inventories by +22 TWh since the start of Oct, the second-largest late-season storage build in the last ten years, and compared with an average build from Oct 1 to Oct 12 of just +14 TWh:


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  #243 (permalink)
 SMCJB 
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23 Days without a margin increase but the next one is here...

NG Margin increase effective COB October 29th, 2021

Maintenance margin's increasing as follows (Note: Non-member initial margin rates will be 110% of these)

Tier 1-3 / Dec21-Feb22 from $6400 to $700 +$600 +9.4%
Tier 4 / Mar22 from $6000to $6500 +$500 +8.3%
Tier 5 / Apr22 from $2800 to $3000 +$200 +7.1%
Tier 6 / May22 from $2100 to $2200 +$100 +4.7%
Tier 7-11 / Jun22-Oct22 from $1950 to $2150 +$200 +10.3%
All other months unchanged.

https://www.cmegroup.com/notices/clearing/2021/10/Chadv21-389.html

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  #244 (permalink)
 SMCJB 
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ron99 View Post
Sep 30 inventory was 826. Average increase in inventory for Oct the last 10 years is 22. With average Oct final 2021 inventory would be 848.

EU storage peaked at 856 on Oct 21st (vs ten-year median of Oct 26-27)

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  #245 (permalink)
Sagal
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SMCJB View Post
EU storage peaked at 856 on Oct 21st (vs ten-year median of Oct 26-27)

A naive question, I was never looking when I was briefly trading NG (mostly with naked put options 2 years ago) to European situation or European weather, do you really think that things have changed so much that the situation in Europe can have a significant impact on NG traded at NYMEX? Otherwise why even have a look to the European storage, unless you trade European gas? I start to refollow a little bit this commodity due to the season but Politics (Poutine, Bielorussia etc) coming into the game renders this one even more complicate (already only the weather is a headache).

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  #246 (permalink)
 myrrdin 
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Sagal View Post
A naive question, I was never looking when I was briefly trading NG (mostly with naked put options 2 years ago) to European situation or European weather, do you really think that things have changed so much that the situation in Europe can have a significant impact on NG traded at NYMEX? Otherwise why even have a look to the European storage, unless you trade European gas? I start to refollow a little bit this commodity due to the season but Politics (Poutine, Bielorussia etc) coming into the game renders this one even more complicate (already only the weather is a headache).

The amount of Natural Gas transported via ships world-wide is significantly larger than some years ago.

Best regards, Myrrdin

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  #247 (permalink)
 ron99 
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Sagal View Post
A naive question, I was never looking when I was briefly trading NG (mostly with naked put options 2 years ago) to European situation or European weather, do you really think that things have changed so much that the situation in Europe can have a significant impact on NG traded at NYMEX? Otherwise why even have a look to the European storage, unless you trade European gas? I start to refollow a little bit this commodity due to the season but Politics (Poutine, Bielorussia etc) coming into the game renders this one even more complicate (already only the weather is a headache).

Prior to 2016 the US exported almost no LNG. Thus Europe weather didn't matter then. Much easier to trade NG then.

With LNG exports now taking over 10% of US NG production, weather and demand in the rest of the world matters.

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  #248 (permalink)
 SMCJB 
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Sagal View Post
A naive question, I was never looking when I was briefly trading NG (mostly with naked put options 2 years ago) to European situation or European weather, do you really think that things have changed so much that the situation in Europe can have a significant impact on NG traded at NYMEX? Otherwise why even have a look to the European storage, unless you trade European gas? I start to refollow a little bit this commodity due to the season but Politics (Poutine, Bielorussia etc) coming into the game renders this one even more complicate (already only the weather is a headache).

As @myrrdin and @ron99 mentioned, US LNG exports have increased significantly over the last 10 years. With US Natty prices in the Gulf Coast (where most of the export terminals are located) around $5/MMBtu and worldwide prices at $25 for TTF (Europe) and $31 for JKM every drop of LNG that can be exported, will be.

It should be noted, that while we are exporting LNG from the Gulf Coast as fast as we can, during winter we will also be importing LNG. New England is still capacity constrained and can not support itself purely from US pipeline flows. As such places like the Everett LNG Facility in Boston Harbor will be importing LNG, which is also part of the reason that Natural Gas price in Boston (aka Alqonquin City Gate) are about $20/MMBtu for delivery in January despite prices in the Gulf being $5*.

* The Algonquin basis is the price the price spread between Algonquin City Gate and Henry Hub. This can be traded on ICE as product ALQ. For price information go to https://www.theice.com/marketdata/reports/142 and select product ALQ.

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  #249 (permalink)
Sagal
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ron99 View Post
Prior to 2016 the US exported almost no LNG. Thus Europe weather didn't matter then. Much easier to trade NG then.

With LNG exports now taking over 10% of US NG production, weather and demand in the rest of the world matters.

I agree that it matters more now than 10 years ago but the question is how much more does it matter for NG traded in NYMEX?
Did I read somewhere that 90% of this 10% of US NG production is anyway for Asia, and almost nothing for Europe and that most of the contracts for Asia are long term contracts with a prespecified price?
So I would be more comfortable going long at the current level of price if the US forecast is clearly bullish, whatever the situation in EU is or will be.

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  #250 (permalink)
 SMCJB 
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In my example the prices in Boston for the peak of winter are $15/MMBtu higher than Henry, as that's the price they get the needed LNG to balance their system. I think you could also make the argument that if we have a cold winter here, and prices do spike that US/Henry prices could spike to the level where we start curtailing exports. I'm not sure what that price actually is but its considerably higher than $5.


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