NATGAS: Natural Gas End of Day Summary: Henry Hub Climbs
Jan-06 19:34
Henry Hub front month is heading for its highest close since Dec. 30, amid cold weather driven domestic demand boosts and record LNG feedgas flows.
- US Natgas FEB 25 up 9.5% at 3.67$/mmbtu
- US Natgas MAR 25 up 5.5% at 3.11$/mmbtu
- Lower 48 natural gas demand is up to 118.75bcf/d today, Bloomberg said, well above the previous five-year average of 100bcf/d.
- The Lower 48 average temperatures are expected to remain below normal throughout the coming two weeks while the NOAA 6-14 forecast shows the biggest anomalies in the Lower Atlantic and Gulf Coast regions.
- US heating demand for the week ending Jan. 4 was 42 HDD below the long-term normal, according to Bloomberg/NOAA.
- US domestic natural gas production is estimated at 103.7bcf/d today, according to Bloomberg.
- US LNG export terminal feedgas is at a record high of 14.868bcf/d today, Bloomberg said.
- The new US Plaquemines LNG export facility appears to have loaded its second LNG cargo on January 5, ICIS said.
- Natural gas producers in Western Canada faced multiple challenges in 2024, but 2025 promises improved market conditions with the start of LNG Canada, Platts said.
- JKM is expected to hold steady in the week to Jan. 10, as the market faces uncertainties from the halt of the Russian-Ukraine gas transit deal, Platts said.
- Europe is burning through its gas at the fastest rate in seven years as cold weather ramps up heating needs, Bloomberg said.
- Indian Oil is seeking a term deal for 12 LNG cargoes a year for up to 20 years starting 2027/2028, Bloomberg said.
- PetroChina's customers are reselling surplus pipeline gas volumes under 2024-25 contracts due to weak downstream demand.
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MNI UST Issuance Deep Dive: Dec 2024 (2/2)
Dec-06 21:53
Throughout November’s policy and market volatility, though, Treasury auctions largely impressed, with 5 of 7 nominal coupon sales trading through.
- Auction Results: November’s nominal coupon auctions were generally strong, with five out of seven auctions trading-through, of which four saw a positive reading on MNI’s Relative Strength Indicator (RSI). The remaining two auctions; 3 and 20-year auctions tailed. See page 2.
- Upcoming Supply: Issuance resumes next week with sales of $58B in 3Y Note, $39B in 10Y Note (reopen), and $22B in 30Y Bond (reopen). December is set to see $15B in nominal Treasury coupon sales, in addition to $22B in 5Y TIPS and $28B FRN for a total of $365B – slightly below the Oct and Nov totals of $369B which were joint-highest since Oct 2021.
- MNI's review includes a calendar of upcoming auctions and buyback operations.
US TSYS/SUPPLY: MNI UST Issuance Deep Dive: Dec 2024 (1/2)
Dec-06 21:51
MNI's latest US Treasury Issuance Deep Dive has just been published (PDF link here):
November proved a dramatic month for Treasuries. Yields were volatile before and after the Nov 5 election - after ending October at 4.28%, 10Y yields peaked at five-and-a-half-month high just above 4.50% mid-month before closing November just below 4.18%, as markets attempted to price in the implications of a Republican “sweep”.
- Also buffeting rates was speculation over the would-be successor to Treasury Secretary Yellen. President-elect Trump’s selection of hedge fund manager Scott Bessent was greeted with bull flattening in the curve, implying perhaps that he’s seen as more cautious on fiscal deficits than some of the alternatives (he has expressed support for halving the annual budget shortfall to 3% of GDP).
- The first quarterly Refunding process of Bessent’s Treasury is in early February, by which point we may start to have a better sense of the incoming administration’s approach to both fiscal policy and to more issuance-specific considerations such as duration management.
- Bessent for instance has argued that Yellen’s Treasury erred from a risk management perspective by boosting short-duration issuance, and there are suggestions he would be in favor of reversing course, telling Bloomberg in June “When rates are very low, you should extend duration…I think it’s very unfortunate what Secretary Yellen’s doing. She’s financing at the front end, and she’s making a bet on the carry trade, which is not good risk management.”
US LABOR MARKET: MNI US Employment Insight: Soft Enough To Keep Fed Cutting
Dec-06 21:05
Our latest Employment Insight has just been published and emailed to subscribers.
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