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Monday, October 16, 2017
Natural gas continued its late-week rally on Friday, rising a further 1 cent or 0.4% to close at $3.00/MMBTU, its highest close since September 29, to cap off a weekly gain of 4.8%. The commodity got a shot in the arm on Thursday after an otherwise ho-hum +87 BCF EIA-reported weekly storage injection, perhaps suggesting a relief rally more than anything else, although record LNG exports and an anticipated bullish storage injection in next week’s EIA storage report likely also contributed. Even after the rally, natural gas remains undervalued by 11.5% versus my calculated Fair Price based on current inventories alone, although this undervaluation falls to under 3% based on December projections and futures prices. Crude oil had a strong week as well, rising 85 cents or 1.7% on Friday to settle at $51.45/barrel, up 4.4% on the week. Like natural gas, it was the highest close for the commodity since September 29. Brent crude rose 2.8% on the week to $57.17/barrel so while the Brent-WTI spread narrowed, it still remains at a very robust $5.72/barrel, maintaining upward pressure on domestic oil exports. My Oil & Natural Gas Portfolio rebounded sharply on the week, rising 4.3% to close within 0.4% of a new 2017 high, up +20.6% since …

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Intraday natural gas storage is based on both forecast and observed temperatures as well as early-cycle pipeline data. Today’s projected injection or withdrawal is updated between Midnight and 1 AM and intraday storage changes are updated hourly.

Cheniere Energy’s Sabine Pass Liquefied Natural Gas(LNG) liquefaction facility is located on the Gulf Coast on the Texas/Louisiana border and became the US’ first LNG export facility in March 2016. The plant receives feedgas deliveries via Cheniere’s wholly owned Creole Trail Pipeline, an 85-mile pipeline that itself receives gas from the Transco, Natural Gas Pipeline of America (NGPL), Texas Eastern (TETCO), and Trunkline pipelines. Liquefied natural gas represents a temperature-independent source of natural gas demand that will become increasingly influential in natural gas supply/demand balance.

LNG tankers transport natural gas that has been cooled and compressed to 1/600th its original volume from Sabine Pass to markets throughout the world. Most tankers have a carrying capacity of the equivalent of 2-5 BCF of gaseous natural gas. The maps and tables below plots the positions of the active fleet of over 300 LNG tankers that have logged a position within the past 3 days.

Powerburn is natural gas burned for the purpose of electricity generation. During the summer months, it is the leading single component of daily natural gas demand. One of its main uses from an analytical standpoint is a metric for the competitiveness of natural gas versus other fuels. This makes powerburn less temperature-dependent than other elements of natural gas demand and it serves as a useful proxy for the looseness/tightness of the gas market.