NATGAS: Natural Gas End of Day Summary: Henry Hub Surges
Jun-06 18:42
Henry Hub extended gains today, supported by higher demand and warm weather to offset the decline from a large gas storage build in EIA data yesterday.
- US Natgas JUL 25 up 2.6% at 3.77$/mmbtu
- US Natgas AUG 25 up 2.6% at 3.85$/mmbtu
- Baker Hughes US rig count: Gas: 114 (5) - up 16 rigs, or 16.3% on the year.
- Lower 48 natural gas demand is estimated up 587 mmcf/d today and the highest since April 11 at 72.45 bcf/d, BNEF shows. Demand is well above the previous five-year average around 66 bcf/d.
- Average temperatures in Lower 48 are forecast to gradually warm and remain above normal throughout the coming two weeks. The NOAA 6-14 forecast shows mostly at or above normal temperatures across the US with the largest anomalies in the Mountain region. The GFS 6z 15day has risen nearly 20 CDDs nationally.
- US domestic natural gas production is estimated down 177 mmcf/d on the day at 106.08 bcf/d today, according to BNEF. Production averaged 105.68 bcf/d over the previous week.
- Total feedgas flows to US LNG export terminals are still curtailed at 13.57bcf/d today, Bloomberg shows. Ongoing maintenance at Sabine Pass and Cameron is partially offset by Plaqumines feedgas rising to another record 2.729bcf/d today.
- Export flows to Mexico remain steady at 7.71bcf/d today compared to a 30 day average of 7.68 bcf/d, BNEF shows.
- Malaysia’s LNG exports have seen a gradual recovering over the past three weeks after maintenance last month, according to Bloomberg.
- Asia spot prices eased slightly this week, slipping for the first time in five weeks, as weak demand in the region weighed on prices, Reuters reports.
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Historical bullets
FED: FOMC press Conference Q&A Begins
May-07 18:40
- Q: Are you any closer now to deciding which side of the mandate is going to need urgent care first?
- A: I don’t think we can say which this will shake out. There’s a great deal of uncertainty for example on tariffs on where they settle out and then there implications. Ultimately our policy rate is in a good place.
- Q: Hearing you describe what you are looking for in terms of being able to make a decision, it sounded like that's a long-term process before you sound like you are going to be comfortable or the committee would be comfortable to act on what the data is telling you.
- A: I don’t think we know. The labor market appears to be solid, inflation running just a bit above 2%. Our policy is modestly or moderately restrictive. 100bp less restrictive than last fall, we’re in a good place to wait and see. We’re going to watch the data, it could move quickly or slowly.
FED: FOMC Remains Well Positioned to Wait for Greater Clarity
May-07 18:38
- Near-term measures of inflation expectations moved up as reflected in both market and survey-based measures. Survey respondents including consumers, businesses and professional forecasters point to tariffs as the driving factor. Beyond next year or so, however, most measures of longer-term expectations remain consistent with our 2% inflation goal.
- Very similar to Apr 16 comments on highly uncertain effects of Trump administration policies.
- If the large increases in tariffs that have been announced are sustained, there are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment.
- The effects on inflation could be short lived reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent.
- “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.” – looks identical to Apr 16.
FED: Chair Powell Begins May FOMC Press Conference
May-07 18:37
- Powell: Despite heightened uncertainty the economy is still in a solid position. The unemployment rate remains low and the labor market is at or near maximum employment. Inflation has come down a great deal but has been running somewhat above our 2% longer run objective.
- The risks of higher unemployment and higher inflation appear to have risen and we believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments.
- PDFP grew at a solid 3% rate in Q1, the same as last year’s pace. Within that, consumption growth moderation whilst investment in equipment and intangibles rebounded from weakness
- On the downturn in soft indicators of households and businesses, it remains to be seen how these developments might affect future spending and investment.
- The unemployment rate remains low and has been within a narrow range for the past year. Overall, a wide set of indicators suggests that conditions in the labor market are broadly in balance and consistent with maximum employment. The labor market is not a source of inflationary pressures.
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