NatGasWeather.com Daily Report

Transcription

1 NatGasWeather.com Daily Report Issue Time: 5:15 pm EST Sunday, February 28 th, 2016 for Monday, Feb 29 th 7-Day Weather Summary (February 28 th March 5 th ): High pressure will dominate much of the US early this week, resulting in widespread highs of 40s and 50s north to 60s and 70s south. Although, there will be a strong Polar front stalling near the Canadian with much colder temperatures, while also leading to areas of rain and snow. The western, central and southern US will be mostly mild and dry this week with warmer than normal temperatures apart from a few milder systems into the NW Coast. There will be a strong winter storm spinning up over the north-central US Tuesday with rain and snow spreading across the Great Lakes and East. On the back side of the storm, colder Canadian air will get tapped to bring a late week surge in nat gas demand before once again easing below normal next weekend Day Outlook (March 6-13 th ): Weather systems will track across the country from west to east with rain and snow, but will fail to tap any truly cold Canadian air. This will result in milder than normal temperatures for much of the country besides at times when weather systems with heavy showers arrive. A fairly mild late winter pattern overall. Trend: Warmer Than Normal Much of US, Near Normal Southwest Nat Gas Demand Next 7 Days: MODERATE-LOW Days 1-3 & 6-7, MODERATE-HIGH Days 4-5 Weather Market Threat: LOW Weather Discussion & Market Effect: April nat gas futures were lower by more than 5 Friday, although rallied late in the day to close near even, potentially aided by a bullish rigs report that showed further declines in the total number of oil (-13) and gas (+1) rigs to 502, but also with a drop in the number of horizontal rigs. The weather data over the weekend maintained the major players we were expecting to show up through mid-march, although with subtle changes, and mainly to the milder, bearish side. Specifically, high pressure covers much of the country, resulting in temperatures much milder than normal to drive fairly light nat gas demand. The exception is across the extreme northern US where a Polar front has stalled near the Canadian border, failing to advance very far, although leading to areas of rain and snow. By late Tuesday, a strong winter storm will strengthen out of the north-central US while tapping a modest amount of subfreezing Canadian air. This system is then expected to sweep across the Great Lakes and East for a notable surge in nat gas demand Thursday and Friday. However, high pressure will quickly follow in its wake next weekend with a return to milder than normal conditions over vast stretches of the country. While warmer than normal overall, there s still expected to be numerous weather systems impacting the US the next two weeks, but none looking ominous as they mainly bring heavy showers and minor cooling. In fact, as we were expecting, the pattern as we approach mid-march should become quite mild with most regions experiencing highs in the 50s to 80s, which for the end of winter is much too mild compared to normal. This could actually lead to the first build of the season several weeks out with just slightly warmer trends. Simply put; we continue to view weather patterns as bearish with the weekend data showing a milder trend and the loss of several HDD s, even with a quick two-day shot of colder air late in the week still on track as a winter storm sweeps across the Great Lakes and East. It s worth noting, there s going to remain very cold air over Canada the next few weeks, but without US weather systems adequately tapping into it, nat gas demand should fail to impress. The markets rallied late Friday, potentially off the rigs report and oversold conditions, but if they were to rally further, they would have to do so in the face of fairly strong bearish weather headwinds as late winter temperatures simply aren t looking cold enough overall. NatGasWeather.com Chief Meteorologist R. Milne

2 Selected Weather Images - Monday: Cold Front Far N w/rain & Snow 8-15 Day: Active Pattern But A Mild/Warm One Polar Front Stalls Monday Far N, Mild Rest US Mid-Week Storm Brings Rain, Snow & Cooling E Pattern Next Weekend Much Too Mild Over US Active Mid-March Pattern, But NOT A Cold One!

3 NatGasWeather.com Weather Model Winter Threat Index BEARISH NEUTRAL BULLISH Warm Mild Cool Cold Very Cold <59 Polar Vortex Weather Model Days 1-5 Days 5-10 Days Trend GFS GFS Ensemble Mean ECMWF ECMWF Ensemble Mean Canadian Canadian Ensemble Mean EIA Weekly Nat Gas Storage Report Outlook Table: EIA Weekly Report (sample period) Week 1 March 3 rd (February th ) Week 2 March 10 th (February 26-March 3 rd ) Week 3 March 17 th (March 4 th -10 th ) NatGasWeather.com Forecast -42 to -52 Bcf -48 to -62 Bcf -20 to -40 Bcf 5-Year Average -137 Bcf -118 Bcf -81 Bcf Compared To Normal Latest Trend Smaller Withdraw Smaller Withdraw Smaller Withdraw BEARISH (warm) NEUTRAL (cold) BULLISH Notes: Last week s EIA storage report came in much lower than estimates (-117 Bcf). Our calculations were again on the correct side as they were fairly confident it would come in low, but certainly not that low. This week will bring a lighter draw with milder week over week temperatures, and much lighter than the 5-year average of -137 Bcf. We have a side we think it will play out to this week, but will hold off for a bit more data.

4 Current Month: February Monthly Temperature Anomalies Observed Month To Date: February 1-26 th Forecast Rest of Month: February th Total HDD s yr Ave 736 HDD Difference -9% Total HDD s yr Ave 78 HDD Difference -28 Temperature Anomaly Forecast Next 3 Months March April May Forecast Total HDD & CDD 30-yr Ave (647 +7) Nat Gas HDD/CDD Demand % Forecast Total HDD & CDD yr Ave ( ) 408 Nat Gas HDD/CDD Demand -6% Forecast Total HDD & CDD 30-yr Ave ( ) Nat Gas HDD/CDD Demand % Observed Previous 3-Month Temperature Anomalies November December January Total HDD s yr Ave 577 HDD Difference -14% Nat Gas Use vs 5-yr Ave +36 Bcf Total HDD s yr Ave 896 HDD Difference -28% Nat Gas Use vs 5-yr Ave -144 Bcf Total HDD s yr Ave 974 HDD Difference -3% Nat Gas Use vs 5-yr Ave +19 Bcf

5 Jan'14 Feb'14 Mar'14 Apr'14 May'14 Jun'14 Jul'14 Aug'14 Sep'14 Oct'14 Nov'14 Dec'14 Jan'15 Feb'15 Mar'15 Apr'15 May'15 June'15 July'15 Aug'15 Sep'15 Oct'15 Nov'15 Dec'15 Jan'16 Last This BCF /DAY Week 1: March 3 rd EIA Report - NatGasWeather.com Forecast: -42 to -52 Bcf DATE 30-year Average HDD NOAA HDD D-1 D-2 D-3 D-4 D-5 D-6 D -7 Forecast Trend 2/ / / / / / / *Forecast 2016 Feb th : HDD=138 CDD=1 30-Year Ave: HDD=177 CDD=1 5-Year Ave Withdrawal= -137 Bcf **Daily Official Values in HDD Demand Table: LOW 0-20 MODERATE HIGH VERY HIGH 33+ Notable Daily State Heating Degree Days (HDD s) February 28 th March 4 th NORTH Notes HIGH VERY HIGH New York: =206 Modest Demand, Increasing Late Week Ohio: = 203 Modest Demand, Increasing Late Week Penn: = 193 Modest Demand, Increasing Late Week Illinois: = 210 Modest Demand, Increasing Late Week SOUTH: Texas: = 22 Mild Pattern This Week Florida: = 14 Warm/Mild Next 7-days Louisiana: = 37 Stronger Demand Late This Week California: =40 Mild Pattern Next 7-days US Dry Nat Gas Production