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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
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NG Margin increase effective COB October 6th, 2021
Maintenance margin's increasing as follows (Note: Non-member initial margin rates will be 110% of these)
Tier 1-4 / Nov21-Feb22 from $5800 to $6400 +$600 +10.3%
Tier 5 / Mar22 from $5200 to $5200 +$800 +15.4%
Tier 6 / Apr22 from $2650 to $2800 +$150 +5.7%
All other months unchanged.
I think too many are making too much of the current Europe NG inventory levels. The sky high 2019/2020 winter Europe NG inventory levels is making expectations too high for what is needed.
Yes current Europe NG inventory is below recent levels but it is higher than 2011, 2012 and 2013.
The amount of decrease of Europe NG inventory for each winter was
2011/2012 305
2012/2013 552
2013/2014 346
2014/2015 637
2015/2016 510
2016/2017 716
2017/2018 773
2018/2019 512
2019/2020 485
Average of 537.
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.
With an average winter of 537 that would leave 289 at end of winter. That is higher than 5 of last 10 prior years.
I would like to add that nobody here in Austria discusses a shortage of Natural Gas for this winter. Everybody complains about the high price, but they are convinced that there is enough gas around.
In my opinion, the "shortage" of Natural Gas is a tactical maneuver of Gazprom to put pressure on politicians to open the new pipeline "North Stream 2". According to NZZ, operation could be started as early as end of October.
I've never traded European Gas or Power, and it is definitely not something I consider myself well versed on. Please don't consider the following to be my opinion, I'm just enjoying the discussion.
But when people look at the last 5 years they see the following, which is definitely more concerning.
That data has an average of 537, std dev of 155 and a slope of 25. I think the slope is important as its saying that overall demand is increasing year on year. Obviously we are ignoring the effect of temperature here.
If we use your 848 (which I agree is low)
normal winter 537 gives 311 which is in line with last year, and as you say higher than 5 of last 10 prior years.
if we build a simple regression model, where injection year is the x-variable and storage drawdown is y-variable it has slope 25.55 and intercept -50945. Hence projections for 2020 (Covid year) would have been 665 and for 2021 is 690.
665 would leave them at 183 and 690 at 157. Both would be lowest in 10 years.
winter 1 std dev higher than normal is 692 which gives 155, which would be lowest in 10 years.
winter 2017 was 773 which gives 75, which is so low its almost off your chart!
Relatedly prices went absolutely nuts today in Europe. With prices already north of 100 (versus long term average of probably about 20), they touched 160 before crashing back down! In $/MMBtu I believe this equates to a daily range of $33.6 to $54.8! (Euro NG trades in Euro/MW)
The problem with looking at the 5 year average is
1. It is too few number of years to be statistically significant.
2. The last 9 months of 2019 and all of 2020 Europe inventory are so atypical that that data should be ignored.
One reason US HH NG futures are so high now is because of Europe prices. So HH NG traders need to know world NG demand (prior to 5 years ago we never looked at this because US wasn't exporting to anybody but Mexico).
I don't have anything useful to add to your very adroit observations on the European supply situation, but that price chart looks like a textbook blow off top to me. Gun to my head, I'd say the highs are in.
NG price came down significantly when Mr. Putin stated that he will send enough Natural Gas to Europe. It is a political game that has nothing to do with temperatures etc.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
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It's a political ball on both sides of the Atlantic....
Empty Desks at the State Department, Courtesy of Ted Cruz
Dozens of nominations have been held up by a fight between the Texas senator and the Biden administration over a Russian gas pipeline project.
A bitter fight with Senator Ted Cruz, Republican of Texas, over a Russian gas pipeline has created what Biden officials call a personnel crisis, with Mr. Cruz delaying dozens of State Department nominees, including 59 would-be ambassadors, and vowing to block dozens more.
...
“President Biden has insisted on giving a multibillion-dollar gift benefiting Russia, hurting America and hurting our national security interests,” Mr. Cruz said on the Senate floor in August.
Some images, which can be seen in the following link, I have already seen here while reading along. But no one has mentioned the following link in which you can find more information about the topic. However, I think this could be an addition to existing interest for one or the other who is currently on the road in this market.
Europe's Gas Prices Surge To Avert Risk Of Winter Shortage:
And yes, I also agree that the given situation and the agenda behind it is once again very much about political decisions from various positions, especially through the influence and pressure that green parties and politicians exert on the positions of the respective governments.
