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This is America's Largest and Most Widely Read
Weekly Natural Gas Storage Survey and Report |
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Our Tealeaves:
Last week's week's EIA report came in about 8 Bcf lower than the Metro Desk Consensus (EIA at -78, consensus at -86) but analysts called it a win nonetheless. Actually, the year has started off fairly well for analysts, unlike last year. This year we've only really seen one major misfire, and a couple minor surprises: report dated 1/26 had the EIA at -192 and the Metro Desk Consensus was about 19 Bcf lower at -173.6 Bcf. Apart from that surprise (that nobody saw coming nor did anybody manage to offer a decent explanation) the market has done a decent job at calling the numbers in Q1. Last year, this time, it was already fairly clear that analysts would be licking their wounds for the balance of the year. Last year's cold weather and impressive production figures seemed to confound everybody.
Since the top of this year, analysts have missed the tape by: 1/5 (2 Bcf); 1/12 (4 Bcf); 1/19 (1 Bcf); 1/26 (19 Bcf); 2/2 (5 Bcf); 2/9 (7.8 Bcf) -- and tomorrow? Hard to tell. Our range minus the outliers is only 24 Bcf. However, we note that the range between the three categories we track is above the magic 3 Bcf -- it's actually a high range of 6.1 Bcf. Typically, if the range is higher than 3 Bcf between the three categories we track (surveys, independant analysts and bank analysts) there is a 70% chance a surprise of over 5 Bcf is in the cards. However, last week's slight surprise of 8 Bcf, wasn't exactly telegraphed. The last time we had a 3+ Bcf range between the three categories was on 2/2: the range was 3.1 and EIA was exactly 5 Bcf away from the consensus. Prior to that, on the report week 1/19, the categoric range was a whopping 5.6 Bcf, yet that week the Consensus was only 1 Bcf away from the EIA report. So, this particular tool is already batting less than .400 this year. The 6.1 range this week should spell surprise, but, no guarantees. Seems when the range is between 3.1-5.1 Bcf, there is a better chance for a surprise. A range higher than 5.1 but less than 7 seems to be less certain. We'll know in a few hours.
Last year, same week, the market was very good. We even had a spot-on winner. Fifteen forecasts came within 5 Bcf of the tape and 24 forecasts came within 10 Bcf of the report number. EIA came in at -233 and our consensus estimate was -234.2 Bcf. --the editor
According to EIA, the amount of U.S. working natural gas in underground storage at the end of March 2012 is expected to be the highest since 1983 for the close of the month, the traditional end of the winter heating season. A combination of warmer-than-normal temperatures this winter that reduced gas heating demand and rising domestic gas production has contributed to high inventories. This winter, warmer-than-normal temperatures reduced natural gas heating demand. Increasing natural gas production, especially in the Marcellus shale region, likely contributed to lower storage withdrawals as more gas supply in the Northeast reduced the need to bring up stored gas from the Gulf Coast. According to EIA's February Short-Term Energy Outlook, working gas in underground storage is projected to total 2,066 billion cubic feet at the end of March, up 31% from a year ago. This would mark the second time U.S. natural gas storage inventories topped 2,000 billion cubic feet at the close of winter and would put this year's inventories near the March 1983 record of 2,148 billion cubic feet. High natural gas inventories at the end of the heating season could put downward pressure on wholesale natural gas prices, which have already declined this winter. Some storage operators may require their customers to withdraw their stored natural gas to ensure the reliability of the storage facility. These required withdrawals could increase the supply of natural gas in the market; however, the circumstances will likely vary by region and company. Currently, storage operators reflect a wide range of inventory levels, and they have a variety of ways they can work with their customers to manage these inventory levels. In 2008, EIA issued a report indicating that contractual requirements for customers to reduce their end-of-season storage levels did not appear to be a major driver determining aggregate end-of-season storage levels for 2008.
BENTEK's Flow Model came in at -119 this week and it's S/D Model said -120 Bcf. The firm considers the 119-Bcf withdrawal to have most of the risk to the high side or a larger draw again this week. "The largest risk is in the Producing Region, where storage withdrawals from depleted fields increased by 78% week-on-week." BENTEK projects an 85-Bcf withdrawal for the East this week, bringing regional working gas inventories to 1,327 Bcf. This level is 300 Bcf above the 5-year average and 373 Bcf above last year. BENTEK expects a 26-Bcf withdrawal in the Producing Region in Thursday's EIA report, bringing inventories to 1,062 Bcf. This level is 376 Bcf above the 5-year average and 351 Bcf above the 5-year high set in 2010. BENTEK projects an 8-Bcf withdrawal for the West this week, bringing regional working gas inventories to 380 Bcf. This level is 98 Bcf above the 5-year average and 101 Bcf above last year.
Meteorologist Steve Gregory, at -121 this week, says the end of the month is setting up as a classic stormy one. He notes that "JAN had the 2nd greatest number of tornadoes on record, was the 4th warmest nationwide, and 3rd lowest snowfall. Looks like another very severe WX environment again this spring as well," he tells us. "I still see triple digit draws for the rest of month - but nothing to eat into surplus..."
UBS expects a draw of 115 Bcf this week. "We estimate inventories decreased to 2,773 Bcf, widening the surplus vs. 2011 and the 5-year average to 862 Bcf and 738 Bcf, respectively." Last week, weather was 28% and 18% warmer than the year ago the 5-year average, respectively. Since September, weather has been 17% warmer than last year and 13% warmer than the 5-year average. Roughly 37% of HDDs remain ahead of us. "We estimate the weather-adjusted S/D balance was little changed WoW for the week ending 2/3, and has been ~4.3 Bcfd undersupplied vs. the 5-year average and the year ago due lower than normal imports and an increased fuel switching from coal-to-gas. We forecast inventories bottom on 3/31 at 2.1 Tcf (0.58 Tcf above normal and >0.4 Tcf above the 2006 record high)."
Raymond James is looking for a draw of 118 Bcf this week. "Our y/y comp is a withdrawal of 139Bcf. The market was 3.9 Bcf/d looserlast week and has averaged 1.8 Bcf/d looser over the last four weeks. We expect the market to run 3.0 Bcf/d looser on a y/y basis for the week. Thus, our official forecast for this Thursday is for a withdrawal of 118 Bcf. If our forecast is right, the year-over-year storage surplus of 744 Bcf will increase by 115 to a surplus of 859 Bcf.Next week, the NOAA is forecasting 199 TDDs (197 HDDs, 2% below normal, and 1% below last year). When compared to last year, the weeks of January 13th; January 27th - February 3rd; and February 17th appear to be most applicable. These weeks averaged the equivalent of 227 HDDs and a withdrawalof 181 Bcf. After adjusting for weather, we arrive at a weather-adjusted y/y comparable withdrawal of 151 Bcf. We expect the market to be 3.0 Bcf/d looser on a y/y basis for the week.Thus, official forecast for next Thursday is for a withdrawal of 130 Bcf. If our forecast is correct, the y/y storage surplus of 859 Bcfwill decrease by 49 to a surplus of 810 Bcf.
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Weather Tealeaves
Weather forward views courtesy of Commodity Weather Group (www.commoditywx.com).
Thought of the Day: Cautious Progression.
While we still do not see any setups for any sustained strong cold patterns evolving here, a pop in the ridge pattern up into Alaska late in the 6-10 day and early in the 11-15 day is helping to briefly drive down some stronger cold through North America. One push moves into the Midwest and Plains late in the 6-10 day and probably washes out (modifies) by the early 11-15 day. A second push sweeps into the West and then mid-continent potentially around the middle of the 11-15 day and then weakens as it advances east and south. By mid-to-late 11-15 day, the Pacific ridge is already pulling back such that the pattern starts warming again across North America- just in time for early March.
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Energy Metro Desk Storage Survey
Average: -117.6 Bcf **for EIA Report date 2/16/12** Median: -119 Bcf Range: -95 to -130 Bcf Early View Avg (from 2/10) -113.9 Early View Med. -110 Early View Range: -95 to -140 Editors Forecast This Week: -115 Bcf '11 EIA Report: -230 Bcf (adjusted from -233) 5-yr avg: -178 Bcf 3-yr avg: -184 Bcf EMD Survey High: -130 Bcf (Ryan Oatman, Cannaccord Genuity) EMD Survey Low: -95 Bcf (Peter Marrin, SNL Markets Editor) EMD Standard Deviation: 6.5 Std. Deviation Previous 30 Weeks (avg is 5.0): 6.5 (2/16) 6.0 (2/9) 5.1 (2/2) 9.2 (1/26) 9.4 (1/19) 7.7 (1/5) 6.1 (12/8) 3.7 (12/1) 4.0 (11/23) 3.7 (11/17) 4.0 (11/10) 4.1 (11/4) 4.4 (10/27) 5.9 (10/20) 3.7 (10/13) 3.5 (10/6) 5.6 (9/29) 3.4 (9/22) 4.4 (9/8) 3.7 (9/1) 3.8 (8/25) 4.0 (8/18) 4.0 (8/11) 3.9 (8/4) 5.6 (7/28) 4.4 (7/21) 4.4 (7/14) The Game: Each week we poll 40+ professional storage forecasts for our weekly Natural Gas Storage Boxscores (as seen in each bi-weekly issue of Energy Metro Desk*). This is North America's biggest natural gas storage survey. We separate each forecast into three distinct categories: 1. Major Surveys (up to 6) + category avg. 2. Bank Analysts (up to 12) + category avg. 3. Independent Analysts/Models/Non-financial Firms (up to 25) + cat. avg
This week, the preliminary tallies (including 37 estimates and 3 categoric averages) are: Survey's Polled This Week: 5 Survey's Forecast Avg: -119.7 Bcf (med. -119)
Bank Analysts Polled: 11 Bank Analyst Forecast Avg: -121.2 Bcf (med. -122) Independents Polled: 21 Bcf Ind Analyst Forecast Avg: -115.1 Bcf (med. -115) APDM (Analog Projectile Devise Method/Dartboard): -122 Bcf
This week's HiBallers: Ryan Oatman, Canaccord Genuity: -130 Bcf
Tim Evans, CITI: -129 Bcf
Donnie Sharp, Huntsville Utils: -125 Bcf
Platts Survey: -125 Bcf
Laurent Key, Socgen: -122 Bcf
This week's LowBallers:
Peter Marrin, SNL Energy: -95 Bcf
Het Shah, Motion Cap: -105 Bcf Reza Haidari, TR Analytics: -109 Bcf
Barn Hill Energy: -111 Bcf Stefan Revielle, Credit Suisse: -111 Bcf **Last week, weather was 28% warmer than the same week last year and 18% warmer than the 5-year average.
Forecasts by 'Coop-Quartile' Range 10th Percentile (bottom 10%) @ -124 Bcf 25th Percentile (bottom 25%) @ -121 Bcf 75th Percentile (Top 25%) @ -114.8 Bcf 90th Percentile (Top 10%) @ -111 Bcf
TFS EIA SWAP: 116/118 ICE Bilateral Swap: 116/117
EEI's Current Electric Generation Report: 75,852 (-8.6%)
EEI for 2010: 82,969
EEI Generation Year-to-date: 457,212 (-8%)
EEI Generation 2011, same period: 497,030
Report Week/Power Generation Outages
*Total average daily outages fell by 1GW last week with 40GW offline.
*Nuclear outages were up 0l3GW with 15.2GW offline
*Hydro outages were essentially unchanged with 5GW offline
*Coal outages fell 1 GW to 20GW
Bottom Line: Outages are slightly above year ago levels.
Current Storage Level: 2,888
Y-O-Y Surplus: +714 Bcf (+33%)
5-Yr Avg Surplus: +714 Bcf (+33%)
Last 4 Reports: -489 Bcf or -122 Bcf per week
Last 4 Reports, 2011: -805 or -201.25 Bcf per week
Last 4 Reports, 5 Yr Avg: -712 Bcf or -178 Bcf per week
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EARLY VIEW RANGE FOR NEXT WEEK: -100 to -150 Bcf
Last Year: -102 Bcf (draw)
5 Yr Avg: -145 Bcf
Prelim HDD: TW: 169 LY: 136 5YR: 185 |
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WEEKLY TRADER POLL: Storage Forecast for 2/16/12 EIA Report
The following electronic poll results are provided to Energy Metro Desk courtesy of First Enercast Financial. Each week dozens of natural gas traders and other interested folks cast their votes on a variety of poll questions, from end of season storage tallies to the expected storage range for the coming EIA report. Go to www.firstenercastfinancial.com to participate. Open to all.
Forecast Range # of Votes Vote/Range %
-50 to -100 Bcf 1 4.35%
-100 to -110 Bcf 8 34.78%
-110 to -120 Bcf 8 34.78%
-120 to -130 Bcf 4 17.39%
-130 to -180 Bcf 2 8.70%
Total Votes: 23 ____________________________________________________________
EIA Storage Report Comments/Last Year, Same Week
"Working natural gas in storage fell to 1,911 Bcf as of Friday, February 11, according to EIA.The 233 Bcf draw ( later adjusted to 230) is much larger than the 5-year average draw for the week of 150 Bcf and last year's draw of 190 Bcf. Stocks are now 141 Bcf below last year's level and 128 Bcf below the 5-year average. The week's draw marks the fourth week in a row that stocks have declined more rapidly than last year.A continuing dip in production largely due to freeze-offs in gas-producing regions has contributed to a larger year-over-year draw for the past several weeks. The resumption of colder weather relative to last year also necessitated a larger draw for residential and commercial heating. As a result of the recent large withdrawals from storage, inventories in the East region are now at their lowest point in the last 5 years, 12.6 percent below the 5-year average. Temperatures in the lower 48 States during the week ending February 10 were colder than normal for the third week in a row and also colder than last year."
Energy Metro Desk Comments/Last Year, Same Week
"For the most recent week, Feb 17, which featured the second biggest pull this year at -233 Bcf, the market had a very respectable showing. We actually had a spot-on winner - the Reuters survey. Our consensus came in at a very respectable -234.2 Bcf. No surprise this week folks, and generally speaking it's the best set of numbers from the crew in many weeks. The survey average was spot-on at -233.74 Bcf and the bank analysts were even better at 233.33 Bcf. The Independent analysts came in third this week with an average forecast of -236 Bcf. Besides Reuters winning all the marbles this week, we had several who were off by a point or less: PIRA at -234 Bcf; Dow Jones at -234; and the Metro Desk Consensus at -234.2. Our HighBaller this week was Robry825, the mysterious model entity at -267 Bcf. The LowBaller for 2/18 was once again Pat Wong at -200 Bcf. Fifteen forecasts came within 5 Bcf of the tape and 24 forecasts came within 10 Bcf of the report number. Better than last week anyway..."
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CME Natural Gas Price Action: Last Year/Same Day
click for more info on CME data resources
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What is the Metro Desk Express?
The 'Express is the country's biggest weekly natural gas storage survey and report. When you subscribe to Energy Metro Desk, our bi-weekly magazine, you receive the 'Express as well as our "Early View" publication as part of your regular subscription. "Early View" offers a week-ahead (every Friday) storage preview of the coming EIA report. That's a lot of good stuff for only $499 a year.
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