Replies to post #14930 on Velocityshares 3X Inverse Natural Gas Etn (DGAZ)

[surehands]

That explains this article: NG going back down?

https://seekingalpha.com/article/4103705-natural-gas-storage-forecast-next-week

Summary

We anticipate an injection of 72 Bcf.

If EIA reports a storage injection of 72 Bcf, it would be compared to +38 Bcf last year and +58 Bcf for the five-year average.

Harvey impacted demand more than it impacted supply, explaining the big jump in weekly injection.


This week's physical balance was thrown into complete chaos, thanks to Hurricane Harvey. For Lower 48 production, we saw weekly production average decrease by 1 Bcf/d, but towards the end of the week, production has already started to recover strongly. Canadian gas net imports also declined by 0.4 Bcf/d.

For demand, power burn was the biggest loser coming in at -5.8 Bcf/d week over week, and thus explains why we are seeing such a high injection figure this week. As of the latest daily figures, power burn has not recovered, and as summer is coming to an end, power burn is expected to drift lower in September.

Mexico gas exports also saw a drop of 0.5 Bcf/d week over week as operations on some pipelines were interrupted.

Despite weakening physical balances, natural gas prices shot up this week, and today's rally is led by winter contracts. In our premium NGF articles to HFI Research subscribers last week, we pegged a fundamental value of $3.30/MMBtu for November versus $3/MMBtu at the time. We said that winter contracts were undervalued. Today, November is trading closer to $3.15/MMBtu.