NATGAS: Natural Gas End of Day Summary: Henry Hub Climbs 10% on Week
Henry Hub is up over 10% on the week amid warmer weather across the US. However, Front month has traded lower today, tracking the wider energy complex.
- US Natgas JUL 25 down 4% at 3.83$/mmbtu
- US Natgas AUG 25 down 3.6% at 3.93$/mmbtu
- President Trump signalled a decision for the US to strike Iran within two weeks which leaves the door open for diplomacy and negotiations.
- US President Trump said on Wednesday that he has approved a plan but is still hoping that Tehran will agree to abandon its nuclear programme.
- A senior Iranian official said that Iran is ready to discuss limitations on its uranium enrichment but that ‘zero enrichment will undoubtedly be rejected.’
- US gas rig count from Baker Hughes: 111 (-2) - up 14 rigs, or 14.4% on the year. This is down from last week’s near three-month high.
- Lower 48 natural gas demand is down 3.96 bcf/d today to 69.75 bcf/d.
- Average Lower 48 temperatures are still forecast to rise over the coming weekend. The NOAA 6-14 forecast shows above normal temperatures centred in the East but now spreading into the northwestern US.
- US domestic natural gas production is estimated 256 mmcf/d lower today at 106.67 bcf/d: BNEF.
- Total feedgas flows to US LNG export terminals are 316 mmcf/d higher today at 13.83 bcf/d, Bloomberg shows.
- Asia’s spot LNG price rose to its highest level in four months: Reuters.
- The first LNG cargo of the year is taking the Northern Sea Route east from Russia’s Yamal LNG: ICIS.
- Disruption of LNG deliveries to regional Middle East importers could strain domestic gas for power generation, triggering a switch to oil-based power generation or even energy shortages, Kpler said.
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US: FED Reverse Repo Operation
RRP usage rebounds to $162.082B this afternoon from $136.033B yesterday, total number of counterparties at 41. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.
EURGBP TECHS: Briefly Pierces 50-day EMA
- RES 4: 0.8768 High Nov 20 ‘23
- RES 3: 0.8624/0.8738 High Apr 21/ High Apr 11 and the bull trigger
- RES 2: 0.8541/8557 High May 2 / High Apr 28
- RES 1: 0.8456 50-day EMA
- PRICE: 0.8441 @ 16:00 BST May 21
- SUP 1: 0.8394 Low May 16
- SUP 2: 0.8359 1.236 proj of the Apr 11 - 16 - 21 price swing
- SUP 3: 0.8316 Low Mar 28 and a key support
- SUP 4: 0.8277 1.618 proj of the Apr 11 - 16 - 21 price swing
The cross rallied to show briefly above the 50-day EMA as the EUR rallied across the board into the Wednesday close. A clear break and close above would conclude the recent bearish phase and shift attention to 0.8541 resistance, the May 2 high. To the downside, the 0.8400 handle has been breached in recent weeks, an extension below which would open 0.8359, a Fibonacci projection.
BONDS: Europe Pi: OATs Flat, BTPs Long, Gilts Very Long (2/2)
- OAT: OAT remains in "flat" structural positioning, where it has been for all of May after a spell in short territory in March/April. The most recent week's trade was indicative of long setting.
- GILT: Gilt structural positioning remains "very long" into the roll, compared with "flat" where it spent most of the prior 7 months. The latest week saw some some shorts set.
- BTP: BTP remains in its typical "long" territory. Trade indicative of short covering was seen in the most recent week.
