Entering text into the input field will update the search result below

Natural Gas: Power Burn Hits New Record High For This Time Of The Year

Jun. 03, 2020 5:40 PM ETUNG, UGAZF, DGAZ, BOIL, KOLD, UNL49 Comments


  • Power burn is hitting an all-time high for this time of the year.
  • We estimate power burn is set to make a new all-time high in early July.
  • Global LNG prices also have started to bottom and move higher.
  • Looking for a helping hand in the market? Members of HFI Research Natural Gas get exclusive ideas and guidance to navigate any climate. Get started today »

Welcome to the record edition of Natural Gas Daily!

Power burn is going to hit a new all-time high this year with the peak being ~3 Bcf/d higher than the previous high (also dependent on how warm the weather gets).

At the current pace, we are likely to surpass ~45 Bcf/d by early July and hit a new all-time high this summer. This will bode very well for summer gas balances, while also insulating the US gas market from the recent drop in LNG demand.

LNG exports are expected to match last year's levels this summer.

The recent drop in LNG exports is because of falling LNG prices which have made US LNG exports uneconomic.

But given how low prices are, suppliers have started to curtail supplies, which have recently pushed prices back up. Keep in mind also that most of the LNG contracts are Brent-linked, so as Brent recovers past $40/bbl, the pressure also will subside.

The combination of the record power burn demand for this time of the year combined with recovering global LNG prices has pushed prices higher, albeit at a slow pace. And despite US shale oil producers restarting production from shut-in wells, lower 48 gas production remains depressed.

The net effect is that the near-term contracts will continue to ebb and flow with where global LNG prices are, but as power burn demand increases, cash prices will get supported. This should help tighten fundamentals, reduce storage injections, and keep prices supported.

We remain short DGAZ.

For readers that have found our natural gas articles insightful, we think you should give HFI Research Natural Gas a try. We provide the following to subscribers:

Come and see for yourself why we are the largest natural gas community on Seeking Alpha.

This article was written by

HFIR Energy profile picture

The #1 natural gas research service on Seeking Alpha.


HFIR Natural Gas prides itself in offering variant perception investment research in macro natural gas analysis.

Due to high demand for HFI Research's natural gas premium only offering, we have decided to launch a cheaper premium service, HFI Research Natural Gas, for natural gas followers.


HFI Natural Gas Premium will offer the current exclusive natural gas content HFI Research subscribers currently receive, they include:

- Daily Natural Gas Fundamentals

- Storage Projection Updates

- "What Are The Traders Saying?"

- A community of natural gas traders and investors to bounce ideas off of.


HFI Research Natural Gas will not include the other benefits HFI Research subscribers currently receive, and for those interested in our full offering, you should visit our main page for information:


Analyst’s Disclosure: I am/we are short DGAZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (49)

beezwaxxxx profile picture
buy the dips revised my call we are going to 2
jeffkad profile picture
and why so?
beezwaxxxx profile picture
cause its over sold and demand will pick up but the virus is the issue causing LNG to fall
It's too late to catch the bottom it is already 1.453 up from 1.43. @beezwaxxxx .
beezwaxxxx profile picture
buy the dips under 1.588
I would @beezwaxxxx , but NG is up 0.015 to 1.684 Sunday evening and going the wrong way to buy it.
beezwaxxxx profile picture
as predicted
beezwaxxxx profile picture
well there goes my 2.3 call out the window I recall 2.3 only if we have summer looks like cool temps killed the bull.. this is why I left and went into bullish oil and oil stocks..RIP bulls..1.5................
Good luck in switching from NG to oil @beezwaxxxx .
beezwaxxxx profile picture
I am into oil stocks and I short them making more money then NG Etf
I am not sure I should be long natural gas............................

No one is but some are brave @tankumo .
Louisiana another large user of nat gas for powerburn...
@HFIR are you guys still short DGAZ?
NG has been stuck at 1.775 for days @Boomshakalakah @ofgktc @beezwaxxxx ? What gives? I'm still on the sidelines.
shoulder season no demand plus corona kill off....going into june powerburn picking up
PT Larry profile picture
@ofgktc Any ideas whether GoM shut-ins are greater than power burn loss due to hurricane?
PT Larry profile picture
@Brian Cellars

Back into UGAZ yesterday and added today. Especially like that EU adding 600-800 billion euros to stimulate the economy.

Today's inventory numbers are good.......

Brian Cellars profile picture
@PT Larry
I'm remaining cautious and taking profits each day early and re-buying late. It's been a steady 6%+ buying at 14 or better and selling around 14.90. I've lightened up on oil positions now so have cash to use here or with gold miners, whichever one decides to start a move up.
PT Larry profile picture
@Brian Cellars Cristabal causing shut downs of crude and NG.


NG market at $1.78, down 2 cents...? But WTI is up...?
JesseC27000 profile picture
demand loss more I guess, mass power-off
beezwaxxxx profile picture
target still 2.3 buy the dips we might get a hurricane in the gulf for now just too much ng for the summer
I thought one was on the way @beezwaxxxx .
Thanks for the article. What's the penalty price per MMBTU you adjust on top of JKM?
Finally, someone did a write up on this summer temps. I may meet or exceed 2016 but regardless it doesn't have to be the same since a significant amount of power additions have come online since then.
BeaBaggage profile picture
the eternal NG bulls ...lol.. the oil wells being turned on all over, so many ready to be tied into years of pipe laid.. enjoy your day trading..! www.bloomberg.com/...
Only two or three companies are reopening wells.
Bea, endless supply. I have followed your Canadian watch list. I keep buying.
BeaBaggage profile picture
@Pops007 well it might be early as headline risk is there for sure but the disc to NAV is incredible in most and they had been forced to take a lot of pain due to the oil patch weakness post 2014 in CA. Have to look outside the US every now and then. Bests, Bea
@HFIR Energy
Why do you prefer to short DGAZ as opposed to going long UGAZ
HFIR profile picture
DGAZ/UGAZ suffer from volatility decay.
can you run a chart comparing a period of UGAZ gains vs DGAZ decline?
CyclocrossSam profile picture
Didn’t think you can short DGAZ.
Thank you for the article. Hopefully we have a bottom here.
That's the 64,000 question @Rob Parmenter .
PT Larry profile picture
Thanks for the article.

It's sweet music to the ear.
Orr77 profile picture
First storm of the hurricane season on direct path for LOOP. It may fizzle out but maybe hold some natty for the weekend in case you get a quick move up. Long some UGAZ for a trade here.
How much natty would be affected if the storm continued into the Loop area in bcfd? Heard in the past the gulf didn’t contribute that much production overall.
16% NG from the Gulf.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.