Natural Gas Margins going up AGAIN! But this time not in the prompt months so probably doesn't effect many here.

NG Margin increase effective COB September 24th, 2021

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

Tier 1-5 / Oct21-Feb22 unchanged at $4800
Tier 6 / Mar22 unchanged at $4200
Tier 7 / Apr22 from $2150 to $2200 +$50
Tier 8 / May22 from $1750 to $1800 +$50
Tier 9-13 / Jun22-Oct22 from $1650 to $1700 +$50
Tier 14-18 / Nov22-Mar23 from $1500 to $1550 +$50

https://www.cmegroup.com/notices/clearing/2021/09/Chadv21-341.html

I don't recommend trading these but CME JKM futures (LNG futures) has had its' margin increased to $48,000 a contract!

The CME JKM LNG Futures don't trade. The ICE JKM LNG Futures do, and also have a very high (but slightly lower than CME) margin requirement of $30,600.

For those of you not sure what we are talking about JKM stands for Japan/Korea Marker, and is an assessment of LNG (Liquidified Natural Gas) prices in the Far East. The contract size is the same as NG at 10,000 MMbtu, but instead of having a price of around $5/MMBtu they currently have a price of $27/MMBtu.

https://www.cmegroup.com/markets/energy/natural-gas/lng-japan-korea-marker-platts-swap.contractSpecs.html
https://www.ice.com/products/6753280/JKM-LNG-PLATTS-Future

Natural Gas Margins going up AGAIN!

NG Margin increase effective COB September 29th, 2021

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

Tier 1-5 / Oct21-Feb22 from $4800 to $5300 +$500
Tier 6 / Mar22 from $4200 to $4600 +$400
Tier 7 / Apr22 from $2200 to $2350 +$150
Tier 8 / May22 from $1800 to $1950 +$150
Tier 9-13 / Jun22-Oct22 from $1700 to $1850 +$150
Tier 14-18 / Nov22-Mar23 from $1550 to $1700 +$150
All other months +$150.

https://www.cmegroup.com/notices/clearing/2021/09/Chadv21-349.html

it's been two days since my last post, so you know what time it is, its time to raise Natural Gas Margins AGAIN!

NG Margin increase effective COB October 1st, 2021

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

Tier 1-4 / Nov21-Feb22 from $5300 to $5300 +$500
Tier 5 / Mar22 from $4600 to $5200 +$600
Tier 6 / Apr22 from $2350 to $2650 +$300
Tier 7 / May22 from $1950 to $2100 +$150
Tier 8-12 / Jun22-Oct22 from $1850 to $1950 +$100
Tier 13-17 / Nov22-Mar23 from $1700 to $1900 +$200
All other months +$50.

https://www.cmegroup.com/notices/clearing/2021/09/Chadv21-353.html

I haven't been following the gas market at all lately as my attention has been focused elsewhere, but I'd love to hear your thoughts on these moves. From more of a fundamental supply / demand outlook I'm curious if you think these prices will be sticky here, or if this will just end up being another squeeze as we tend to see from time to time in NG

US Stocks are unseasonably low but the full picture is the International status. Europe is at dangerously low storage levels going into the winter due to a combination of higher than normal gas generation (due to lower than normal wind), and lack of supply from Scandinavia and Russia. With UK NBP at GBP 2.44/Therm ($33/MMBtu) and Asia JKM at $30/MMBtu you know that even with $6 gas here every US LNG plant is exporting every drop of LNG they can freeze. Also means we can not expect many LNG imports this winter, UNLESS, prices compete with Europe and Asia. This is why Natural Gas for Boston this winter is $23/MMBtu ($6 Henry plus $17 Algonquin Basis!) as Boston is dependent upon LNG imports. Its physically impossible to get enough gas up Algonquin and Tennessee Pipeline.

If it gets cold here this year things could get interesting. If it gets cold in Europe there maybe major problems there!

Appreciate the color. Those prices differentials are nuts. Is Russia playing games or is this an honest supply crunch?

(side note, glad I bought my heating oil and firewood in the spring and summer)

Schnook 

Appreciate the color. Those prices differentials are nuts. Is Russia playing games or is this an honest supply crunch? (side note, glad I bought my heating oil and firewood in the spring and summer)

Regarding the situation in Europe, it is my opinion that Russia reduced supplies to Europe in recent months to put pressure on negotiations regarding the pipeline Northstream 2.

It is interesting to note that storage for natural gas reserves in Germany are owned and operated by Gazprom and not by the German Authorities. Currently, these reserves are very limited.

Best regards from Austria, Myrrdin

Reuters :- Europe's rising energy prices will force factory closures

https://www.reuters.com/business/energy/europes-rising-energy-prices-will-force-factory-closures-kemp-2021-10-01/

Front-month gas futures are now more than six times more expensive than at this point last year,
...
Regional storage sites are still only 74.7% full, the lowest for more than a decade, and compared with a pre-pandemic five-year seasonal average of 87.4%,