Natural Gas Drivers (societe Generale)
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Global Weekly
13 October 2009
Important Notice: The circumstances in which this publication has been produced are such that it is not appropriate to characterise it as independent investment research as referred to in European MIF directive and that it should be treated as a marketing material even if it contains a research recommendation (« recommandation dinvestissement à caractère promotionnel »).
US Natural Gas Drivers Editorial
2
Natural Gas Price Information
4
US NATURAL GAS SCOREBOARD Score
Weight
Market Fundamentals
2.9
60%
U.S. Demand
3.1
40%
Res/comm
4
55%
Industrial - US Economy
2
35%
Power generation (EG)
2
10%
2.0
30%
Domestic Production
1
60%
Canadian Imports
5
20%
LNG
2
20%
3.4
30%
Short-term expectations
4
40%
Long-term expectations
3
60%
Market signals
2.6
40%
Laurent Key
Hedge Funds
3
20%
+1 212 278 57 36 [email protected]
Implied Probability
1
20%
As of last week, funds are longer by 5,000 contracts. Total Open Interest is unchanged. With prices range bound at $4.8-4.9 , ATM vol. may end its decline and stay around 60%. A strong bearish skew on the Nov '09 contract.
Technical Analysis
3
40%
Bearish short-term, bullish medium term on a possible reverse head and shoulder pattern.
Global markets
3
20%
2.8
100%
Rising energy markets may provide a support to NG, but no clear correlation for the moment. A looser supply and demand balance may weigh on prices for the short term. However, flattening production adds a bullish skew for the medium term.
Natural Gas Price Information & Supply/Demand Balance 5 Supply Components
6
Demand Forecasts
7
Demand Breakdown & Inventory
8
Inventory & Withdrawal
9
Weather
10
Technical Analysis NatGas
11
US Natural Gas Forecasts - Last updated 25/09/09 12 Economic Indicators
13
Trading Contacts
16
Stephanie Aymes +44 207 762 58 98 [email protected]
U.S. Supply
Inventories (Storage)
THIS WEEK TREND
www.commodit www.commodities.sgcib.com
Comment Neutral: unexpected rise in production will offset stronger residential demand. Expected colder than normal temperatures in the Northeast and the Midwest are the only bullish factor. Up 2 Bcf/d last week with cool temperatures. The rising trend in res. demand should continue with expected colder than normal temps in high consuming area. Stable w/w but still more than 1 Bcf/d below pre-crisis levels. The seasonal decline in EG demand is compounded by less price-related coal-to-gas switching. Production is already back to H1 '09 levels, due to the combined effect of a strong cash market and pipelines returning from maintenance. A two-week increase of 1.4 Bcf/d, to 56.4 Bcf/d, as Gulf pipeline maintenances finish ahead of schedule. Current spot prices above $3.5 may result in increasing shale gas production for Oct. Rising Southeast output may already be offsetting depressed Rockies production. Down 0.3 Bcf/d last week, on increased domestic demand and declining production. Slightly up last week by 0.3 bcf/d. The completion of global liquefaction facilities, and rising US spot margins, will boost imports to more than1 Bcf/d for the coming winter. Bullish short-term on injection reports; bearish for the medium-term. Cold weather decreases daily injections: Thursday's EIA report expected at 54 Bcf . Next week in the 30-40 Bcf range, respectively 5 Bcf and 25 Bcf below the 5-yr average. Since domestic production may have plateaued at high levels, we expect a tighter supply-anddemand balance by end-of-March 2010. Neutral since inv. Levels will still be high. Bearish short-term, bullish medium term.
Scoring: 1 = strongly bearish bearish 2 = bearish 3 = neutral 4 = bullish 5 = strongly bullish
Important Notice: In relation to European MIF directive, this publication could not be characterised as independent investment research. Please refer to disclaimer on last page.
EDITORIAL
Editorial
A fundamentally bear market, but only for the short term. Two Southeast supply area pipelines, recently back from maintenance, have boosted output to Q1 09 highs. Total US dry NG production jumped to 56.4 Bcf/d from 55 Bcf/d by the end-ofSept. The two pipelines, Fayetteville and Greenville laterals, bring natural gas from the Woodford and Fayetteville shale plays to the Texas Gas system for exports to the Midwest and Mid-Atlantic consuming areas. The the Arkoma (Arkansas Oklahoma) basin flow which include the Woodford shale and part of the Fayetteville shale - has jumped 0.7 Bcf/d from Sep 27. It now sits at 2.6 Bcf/d as of yesterday. About 60% of the total Arkoma basin gross production can be monitored with this sample, so the increase in output in this region may in fact be more than 1 Bcf/d. This increase in production is bearish for the short-term, until more winter demand rebalances the market. The total count of drilling application permits for September suggests that the US output should remain steady for the next month and then start rising again, though at a slower pace than by H2 08. This contradicts SG researchs previous forecast of a mid-December 2009 rebound. Arkansas horizontal drilling permit application count peaked in August 2009 at 152 and was down to 114 for September. After 12 days in October, the count sits at 52, suggesting that total October applications may reach August levels. This increase will be reflected in total Fayetteville shale output as early as midNovember. The situation is similar to Louisianas Haynesville shale: Drilling application count peaked at 70 in July and fell by 43% in August. It remained steady m/m for September at about 40. It now sits at 22
2
13 October 2009
after 12 days in October, possibly the first application count increase since last summer. The Rockies and Pennsylvania are the only areas to have increases in horizontal drilling permit applications for September. The one exception is Colorado, where September permit application count is down to 72 from 534 in July 09. Colorado production should continue to head south for the near term mainly due to concerns over the environmental cost of shale extraction. The Rockies remain the region most hurt by the 2009 price decline, due to higher marginal production costs than in the rest of the US. Southeast horizontal drilling application count
350
Ar - Vertical
Ar - Horizontal
La - Vertical
La - Horizontal
300 250 200 150 100 50 0 Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Source: ZDM, Inc, SG Commodities Research
Overall, US production is now expected to remain at high levels, since increases in Southeast and Pennsylvania output will offset decreases in the Rockies. Nov 09 prices should then correct to the downside, despite the expected below-normal temperatures for the next 11 days. The resulting increase in residential demand should impact the cash market, not futures, but at least will keep storage facilities from high congestion-related pressure issues.
US Natural Gas Drivers
EDITORIAL
A tighter supply-and-demand balance should arise later in the winter, after the market: 1/ experiences the first withdrawals of the heating season, and 2/ gets a better view of Canadian imports. The November temperature forecast is seasonal, which will spur a consequent y/y increase in residential demand due to the slowly improving economy. In Canada, cold weather and rising rig count suggest the start of the winter drilling season. In a few weeks, the market will have a better idea of how much depletion in conventional production fields is hurting total Canadian output. For the short-term, Asia and Europe will remain the main spot LNG buyers, until a 2010 rebound in US imports. Given the current large contango along the curve, the expectation for this tighter winter supply-and-demand balance may already be priced in levels along the curve. To benefit from the expected medium term tighter S/D balance, SG Research recommends buying the March/April spread (Buy March, sell April) at the right time of course: The spread fell to 0 cents too early in the season, and then bounced back to 5 cents with the September rise on the front of the curve. With the October looser supply and demand balance, it is expected to fall back to below 0 cents. We see this move as a buying opportunity since the spread will have to return to high positive levels to encourage withdrawals, as winter gets underway.
US Natural Gas Drivers
Mar/April 2010 Spread (USD/MMBtu) 0.1
Daily Close
0.08 0.06 0.04 0.02 0 -0.02 -0.04 Jul-09
Aug-09
Sep-09
Source: NYMEX, SG Commodities Research
13 October 2009
3
NATURAL GAS PRICE INFORMATION
Natural G as Price I nformation
Spread
$ 35
$2 $1 $1 $0 -$ 1 -$ 1 -$ 2 -$ 2 -$ 3 -$ 3
$ 30
Heating Oil (Upper) Residual Fuel Oil (Lower) Price Range
$ 25
COT Data and Nearby Futures Prices (US$ per MMBTU)
$ 15 $ 10 $5
$ $ $ $ $ $ $ $ $
Source: NYMEX, SG Commodities Research
Source: US CFTC, NYMEX, SG Commodities Research
Volatility Forecasts
Implied Volatility
Probability Price end at this range by by end of Nov
Last Week
90
Current
20%
Last Month
80
15%
160
70
10%
60
Source: Bloomberg, SG Commodities Research
13 October 2009
Source: Bloomberg, SG Commodities Research
$6.95 to $7.25
$6.65 to $6.95
$6.35 to $6.65
$6.05 to $6.35
$5.75 to $6.05
$5.45 to $5.75
$5.15 to $5.45
$4.85 to $5.15
$4.55 to $4.85
$4.25 to $4.55
$3.95 to $4.25
$3.05 to $3.35
NOV12
AUG12
MAY12
FEB12
NOV11
AUG11
MAY11
FEB11
NOV10
Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09
20 AUG10
0
30 MAY10
40
0%
40
FEB10
80
Last Week
5%
50
NOV09
120
Current
$3.65 to $3.95
Impl. Vol
200
$3.35 to $3.65
Hist. Vol
16 14 12 10 8 6 4 2 0
Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-01
$0
Nearby Price
Source: NYMEX, SG Commodities Research
SG Vol Model
4
Futures & Options
'000 lots 100 50 0 -50 -100 -150 -200 -250 -300 -350
NYMEX Natural Gas Price
$ 20
Sep-09
Jul-09
Mar-09
May-09
Jan-09
Nov-08
Jul-08
Sep-08
May-08
Jan-08
Sep-07
Nov-07
Mar-08
Henry Hub Spot Henry Hub Nearby Futures Basis
Price $ 16 $ 14 $ 12 $ 10 $8 $6 $4 $2 $0
Competing Fuels & Nat Gas Prices (US$ per MMBTU)
Jan-02
Natural Gas Prices and Basis (US$ per MMBTU)
Source: SG Commodities Research
US Natural Gas Drivers
NATURAL GAS PRICE INFORMATION & SUPPLY/DEMAND BALANCE
Natural G as Price I nformation & Supply/Dem and B ala nce
UK
UK + cost of shipping
Source: NYMEX, SG Commodities Research
Source: Bloomberg, SG Commodities Research
Source: NYMEX, SG Commodities Research
Supply and Demand (Bcf/d) (Bcf/d)
Net Supply and Demand
Demand in Bcf/d (w/o Bal. Items w/o Mexican Exports)
SG Supply Estimate
2006-2007
SG Demand Estimate
65
30
55
20
45
10
2007-2008
2008-2009
2006-2007
2007-2008
Oct-09
Sep-09
Aug-09
Jul-09
JUL11 MAY12 MAR13 JAN14 NOV14
Jun-09
3 NOV09 SEP10
US
16 14 12 10 8 6 4 2 0 May-09
Last Week
Apr-09
Last Month
Mar-09
Latest
Feb-09
Feb-13
Nov-12
May-11
Aug-12
4 Feb-12
-1.0 May-12
5
Nov-11
0.0
Aug-11
6
Feb-11
1.0
Nov-10
7
Aug-10
2.0
May-10
8
Feb-10
3.0
Nov-09
9
Jan-09
Last Month
Dec-08
Last Week
4.0
US, UK + Shipping Natural Gas Prices (US$ per MMBTU)
Nov-08
Latest
Forward Curves
Oct-08
Spread NBP (UK) - Henry Hub (US) (US$ per MMBTU)
2008-2009
75 65 55 45
0
35 25 20-Jun
35
-10 20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
US Natural Gas Drivers
20-Oct
20-Jun
25 20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
20-Oct
20-Jun
20-Jul
20-Aug
20-Sep
20-Oct
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
13 October 2009
5
SUPPLY COMPONENTS
Supply Compo ne nts
Supply (Bcf/d, incl. netting of Mexican Exports) 2006-2007
2007-2008
Domestic Production (Bcf/d)
2008-2009
65 63 61 59 57 55 53 51 49 47
2006-2007
Net Imports (Bcf/d)
2007-2008
2008-2009
2006-2007
2007-2008
2008-2009
16
53 51
14
49 12
47 45
10
43 41
8
39 37
20-Jun
20-Jul
20-Aug
20-Sep
20-Oct
20-Jun
6 20-Jul
20-Aug
20-Sep
20-Oct
20-Jun
20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
Net Imports from Canada (Bcf/d)
LNG Sendout (Bcf/d)
Rig Counts
2006-2007
2007-2008
2008-2009
12
2006-2007
2007-2008
2008-2009
4
North America
US
20-Oct
Canada
2000
11 10
1600
3
1200
9 8
2
800
7 6
400
1
4 20-Jun
0 20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
6
13 October 2009
20-Oct
20-Jun
20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
20-Oct
20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09
0
5
Source: Baker Hughes, SG Commodities Research
US Natural Gas Drivers
DEMAND FORECASTS
Dema nd Forec asts
LNG Sendout by Location (MMcf/d) 3000 2500
Lower 48 States (Observed) Demand Forecast (Bcf/d) 2008 Demand
Lake Charles
Excelerate
Elba Island
Cove Pt
Everett
Sabine Pass
2009 Demand
NorthEast (Observed) Demand Forecast (Bcf/d) (Bcf/d) 2008 Demand
Forecast
2009 Demand
Forecast
11
2000
42 9
1500 1000
38
7
500 5
0 Mar-07
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
34 29-Sep
4-Oct
9-Oct
14-Oct
19-Oct
29Sep
24-Oct
6Oct
13Oct
Source: Bentek Energy LLC, SG Commodities Research
Source: Bentek Energy LLC, SG Commodities Research
Source: Bentek Energy LLC, SG Commodities Research
SouthEast (Observed) Demand (Bcf/d)
Gulf (Observed) Demand (Bcf/d) (Bcf/d)
Midwest (Observed) Demand (Bcf/d)
2008 Demand
2009 Demand
2008 Demand
Forecast
2009 Demand
2008 Dem and
Forecast
2009 Dem and
20Oct
Forecast
13
6
8
5
12
4
7
11
3 2
6
10
1 5 29-Sep
4-Oct
9-Oct
14-Oct
Source: Bentek Energy LLC, SG Commodities Research
US Natural Natural Gas Drivers
19-Oct
24-Oct
0 29-Sep
9
4-Oct
9-Oct
14-Oct
Source: Bentek Energy LLC, SG Commodities Research
19-Oct
24-Oct
29-Sep
4-Oct
9-Oct
14-Oct
19-Oct
24-Oct
Source: Bentek Energy LLC, SG Commodities Research
13 October 2009
7
DEMAND BREAKDOWN & INVENTORY
Dema nd Brea kdown & I nv entory
West (Observed) Demand (Bcf/d) 2008 Demand
Power Demand (Bcf/d)
2009 Demand
Industrial Demand (Bcf/d)
Power 2006 Power 2008
Forecast
Power 2007 Power 2009
12
Industrial 2006 Industrial 2008
Industrial 2007 Industrial 2009
20
35
19
11 25
18 17
10
15
16
9 29-Sep
5
4-Oct
9-Oct
14-Oct
19-Oct
24-Oct
15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Bentek Energy LLC, SG Commodities Research
Source: Bentek Energy LLC, SG Commodities Research
Residential/Commercial Demand (Bcf/d)
US Working Gas Inventory (Bcf)
Eastern Region Gas Inventory (Bcf)
Res/Comm/Bal 2006 Res/Comm/Bal 2008
Res/Comm/Bal 2007 Res/Comm/Bal 2009
70
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2008
2009
2008
2009
4 000
2 500
3 000
2 000
60 50 40
1 500 2 000
30
1 000
20
1 000
500
10 0
0
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
8
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Bentek Energy LLC, SG Commodities Research
13 October 2009
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: DOE EIA, SG Commodities Research
Jan FebMar AprMay Jun Jul Aug Sep Oct NovDec Source: DOE EIA, SG Commodities Research
US Natural Gas Drivers
INVENTORY & WITHDRAWAL
Inve ntory & Withdra wal
Western Region Gas Inventory (Bcf)
Producing Region Gas Inventory (Bcf)
Total Lower 48 States Injection/Withdrawal (Bcf)
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2008
2009
2008
2009
2008
2009
1 400 500
150 100 50 0 -50 -100 -150 -200 -250 -300
1 200 1 000
400
800
300
600 400
200
200
100
0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: DOE EIA, SG Commodities Research
Source: DOE EIA, SG Commodities Research
Source: DOE EIA, SG Commodities Research
Producing U.S. Region Injection/Withdrawal (Bcf)
Eastern Region Injection/Withdrawal (Bcf)
Western U.S. Region Injection/Withdrawal (Bcf)
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2008
2009
2008
2009
2008
2009
100
30 20
100 50
50
10 0 -10 -20
0 0
-50 -100
-50
-150
-100
-30 -40
-200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: DOE EIA, SG Commodities Research
US Natural Gas Drivers
Jan FebMar Apr May Jun Jul Aug Sep Oct Nov Dec Source: DOE EIA, SG Commodities Research
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: DOE EIA, SG Commodities Research
13 October 2009
9
WEATHER
We ather
Actual v Normal HDD in U.S.
Actual v Normal CDD in U.S.
Normal HDD
Normal CDD
Actual HDD
250
% Difference from Normal
Actual CDD
70
140 120 100 80 60 40 20 0 Aug-09
Feb-09
May-09
Nov-08
Jun-08
Aug-08
Dec-07
Mar-08
Jun-07
Sep-07
Dec-06
20 Dec-05
Aug-09
Feb-09
May-09
Nov-08
Jun-08
Aug-08
Dec-07
Mar-08
Jun-07
Sep-07
Dec-06
Mar-07
Jun-06
Sep-06
Dec-05
Mar-06
0
30
Mar-07
50
40
Jun-06
100
50
Sep-06
150
60
Mar-06
200
10 0 14-Oct
15-Oct
16-Oct
17-Oct
Source: Bloomberg, SG Commodities Research
Source: Bloomberg, SG Commodities Research
Source: Dominion Energy Index, Dominion
Heating/Cooling Demand Forecast - Central
Heating/Cooling Demand Forecast - Eastern
Heating/Cooling Demand Forecast - Western
% Difference from Normal
% Difference from Normal Great Lakes
Great Plains
Lower Mississippi
200 150 100 50 0 -50 14-Oct
15-Oct
16-Oct
Source: Dominion Energy Index, Dominion
10
Heating/Cooling Demand Forecast (U.S)
13 October 2009
17-Oct
18-Oct
Mid-Atlantic
New England
18-Oct
% Difference from Normal Pacific
South Atlantic
450 400 350 300 250 200 150 100 50 0 -50
Rocky Mountains
Southwest
80 60 40 20 0 -20 -40 -60 14-Oct
15-Oct
Source: Dominion Energy Index, Dominion
16-Oct
17-Oct
18-Oct
14-Oct
15-Oct
16-Oct
17-Oct
18-Oct
Source: Dominion Energy Index, Dominion
US Natural Gas Drivers
TECHNICAL ANALYSIS NATGAS
ch nic al Analysis NatGas
TECHNICAL ANALYSIS SNAPSHOT
NATURAL GAS NYMEX Technical Analysis Snapshot Last week at a glance…. NAT.GAS OCT09 OCT09 rallied higher than the third target at 4.42. 4.42 We turn neutral and analyze the NOV09 NOV09 contract.
NAT.GAS NOV09
Next 3 months :
Direction Resistances Supports
8, 8.70/8.80 2.40, 1.95
STOPSTOP-LOSS
6.726.72-3.62/50
Next 3 weeks : Direction
Sentiment & Conviction
3 rd
3 taking profit nd
Resistances
2
6.20
taking profit
5.85
1st taking profit
5.50
Strengthening level Buying level 5.13/5.20 STOPSTOP-LOSS 4.35/4.25 Selling level Strengthening level 1st taking profit Supports
NAT. GAS NOV09
Neutral between 5.13/20 and 4.35/4.25
Graphic elements
Key graphic levels at 4.25 and 5.13/5.50 5.13-4.25 5.50
Indicators
Elliott count 6.72-3.50
US Natural Gas Drivers
3.62
3rd taking profit
3.50
Last price Risk/Reward
4.56 USD /MMBtu NA
Source: SG Commodities Research
Possible bullish pattern (Inverse Head and Shoulders) Tops of May/June They hit key resistances and are at support Hit the long-term resistance but is testing the support at 50% Range
-14-day RSI
3.87
2nd taking profit
Are the limits to watch
Expected direction - bullish then Risk/Reward = expected gain / known risk = (1st taking profit - buying level) / (buying level - stop-loss)
Expected direction - bearish hen Risk/Reward = expected gain / known risk = (selling level - 1st taking profit) / (stop-loss - selling level)
Expected direction - sideways
Sentiment & Conviction
1: Very Bearish
then Risk/Reward = Not Available
2: Bearish
3: Neutral
4: Bullish
5: Very Bullish
13 October 2009 11
US NATURAL GAS FORECASTS - LAST UPDATED 25/09/09
US Natur al Gas Forecasts - L ast updated 2 5/0 9/0 9
SG US Natural Gas Price Past/Forecasts Henry Hub Spot Natural Gas Wellhead Price Residential Sector Commercial Sector Industrial Sector
US$/MMBTU US$/MMBTU US$/MMBTU US$/MMBTU US$/MMBTU
2008 9.1 8.1 15.2 12.5 9.6
1Q 09 4.48 4.14 11.60 10.15 6.23
2Q 09 3.93 3.53 12.22 9.29 4.99
3Q 09 3.33 2.97 12.04 7.47 4.01
4Q 09 3.75 3.24 9.38 7.64 4.52
2009 3.87 3.44 11.25 8.57 4.89
1Q 10 5.13 4.36 9.82 8.59 5.89
2Q 10 5.80 5.15 12.61 9.96 6.40
3Q 10 6.63 5.93 18.19 11.89 7.17
4Q 10 6.25 5.47 12.57 10.50 6.99
2010 5.95 5.23 13.32 10.23 6.60
2008 63.5 8.6 18.2 18.2
1Q 09 71.88 38.03 17.54 16.31
2Q 09 46.74 12.15 16.16 18.44
3Q 09 48.55 7.22 16.20 25.13
4Q 09 63.69 29.47 17.67 16.55
2009 57.72 21.72 16.89 19.11
1Q 10 75.31 40.01 18.65 16.65
2Q 10 48.03 11.87 17.68 18.49
3Q 10 49.92 7.90 17.08 24.94
4Q 10 64.71 30.22 17.75 16.74
2010 59.49 22.50 17.79 19.20
2008 55.1 8.1 2837
1Q 09 56.91 7.88 1668.00
2Q 09 56.91 6.76 2775.00
3Q 09 56.25 7.78 3738.00
4Q 09 55.88 7.31 3102.00
2009 56.49 7.43 3102.00
1Q 10 55.34 8.21 1524.00
2Q 10 55.38 7.06 2395.00
3Q 10 55.73 8.93 3288.00
4Q 10 56.05 8.29 2744.00
2010 55.63 8.12 2744.00
Source : Forecast : SG Commodities Research - Actual : DOE EIA data
SG US Demand forecasts (Bcf) Total US Res/Comm Sector Industrial Sector Electricity Sector Source : Forecast : SG Commodities Research - Actual : DOE EIA data
SG US Supply Supply forecasts (Bcf) Dry Gas Production Net Imports of Natural Gas Working Gas Storage (end of period) Source : Forecast : SG Commodities Research - Actual : DOE EIA data
12
13 October 2009
XXXXXX YYYYYYYY
ECONOMIC INDICATORS
Economic Indi cators
Economic indicators GMT
Period
Last
SG Fcst
Cons
Actual FDI YTD (% YoY)
SEP
-17.5
na
na
Foreign Exchange Reserves, USD
SEP
2131.61
na
na
Money Supply - M2 (% YoY)
SEP
28.5
na
28.4
New Yuan Loans, bln
SEP
410.4
na
420.0
AUG
6.8
na
9.7
SEP
5.4
na
5.4
During the week CH
JN
US
Zew Survey (Econ. Sentiment) White House's Romer Speaks to Economists in St. Louis Fed's Kohn Speaks to Economists in St. Louis New York Fed's Dudley Speaks to International Bankers in NYC ABC Consumer Confidence
9:00
OCT
57.7
50
59.0
OCT-11
-45.0
na
na
12:30 17:00 17:15 21:00
BOJ to Hold Regular Policy Board Meeting Monday12Monday12-OctOct-2009
IN
Industrial Production (% YoY)
SW
AMV Unemployment Rate, % Treasury's Krueger Speaks to Economists in St. Louis Retail Sales (% MoM)
21:45
AUG
-0.5
na
0.5
Retail Sales Ex-Auto (% MoM)
21:45
AUG
-0.5
na
0.5
Business Climate Index
3Q
115.9
na
na
Entrepreneur Confidence Index
3Q
110.2
na
na
US NZ
8:00 17:00
Tuesday13Tuesday13-OctOct-2009 CH UK
BRC Retail Sales Monitor (00:01 BST) RICS House Price Balance, % (00:01 BST)
23:01
SEP
10.7
na
15.0
JN
Bank Lending (% YoY) (00:50 BST)
23:50
SEP
1.8
na
1.7
Bank Lending Banks (% YoY) (00:50 BST)
23:50
SEP
1.9
na
Money Stock M2 (% YoY) (00:50 BST)
23:50
SEP
2.8
na
2.9
BoJ Monetary Policy Meeting
4:00
Consumer Price Index (% MoM)
6:45
SEP
0.5
-0.1
-0.1
Consumer Price Index (% YoY)
6:45
SEP
-0.2
-0.2
-0.2
CPI - EU Harmonised (% MoM)
6:45
SEP
0.6
0.0
0.0
CPI - EU Harmonised (% YoY)
6:45
SEP
-0.2
-0.2
-0.3
FR
23:01
SEP
CPI Ex Tobacco Index
6:45
SEP
118.41
118.35
na
Current Account, EUR bln
6:45
AUG
-1.2
na
na
SP
House transactions (% YoY)
7:00
AUG
-20.3
na
na
SW
CPI - Headline Rate (% MoM)
7:30
SEP
0.2
na
0.4
CPI - Headline Rate (% YoY)
7:30
SEP
-0.8
na
-1.4
Core CPI (% YoY)
8:30
SEP
1.8
na
1.7
CPI (% MoM)
8:30
SEP
0.4
0.1
0.2
CPI (% YoY)
8:30
SEP
1.6
1.1
1.3
DCLG House Prices (% YoY)
8:30
AUG
-8.3
na
na
RPI (% YoY)
8:30
SEP
-1.3
na
-1.5
UK
GE
RPI Ex Mort Int.Payments (% YoY)
8:30
SEP
1.4
na
1.2
Zew Survey (Current Situation)
9:00
OCT
-74
-68
-68.3
US Natural Gas Drivers
13 October 2009 13
ECONOMIC INDICATORS
Economic indicators GMT
House Price Index (% YoY) RBA Governor Stevens Speaks in Perth (00:30 BST) Capacity Utilization (% MoM)
23:30
-21
Industrial Production (% MoM)
na
-15.0
15.70
na
-17.00
0.1
0.1
0.1
0.0
na
0.1
Period
Last
SG Fcst
Cons
Exports (% YoY)
SEP
-23.4
na
Imports (% YoY)
SEP
-17
Trade Balance, USD bln
SEP
JN
Wednesday14Wednesday14-OctOct-2009 CH
JN
SP
BOJ Target Rate, %
EUR
3Q
-8.2
na
na
4:30
AUG F
3.9
na
na
4:30
AUG F
1.8
na
na
Industrial Production (% YoY)
4:30
AUG F
-18.7
na
na
BOJ Monthly Report
5:00
EU 25 New Car Registrations, %
6:00
SEP
3.3
na
na
ECB Publishes Monthly Report
8:00
OCT
Domestic CGPI (% MoM) (00:50 BST)
23:50
SEP
Domestic CGPI (% YoY) (00:50 BST)
23:50
SEP
-8.5
na
-7.9
CPI (NIC incl. tobacco) (% MoM)
8:00
SEP F
0.3
-0.2
-0.2
Consumer Confidence
5:00
SEP
40.4
na
41.3
CPI (NIC incl. tobacco) (% YoY)
8:00
SEP F
0.1
0.2
0.2
Consumer Confidence Households
5:00
SEP
40.1
na
na
CPI - EU Harmonized (% MoM)
8:00
SEP F
0.2
0.6
0.6
Consumer Price Index (% MoM)
7:00
SEP
0.3
-0.2
-0.3
CPI - EU Harmonized (% YoY)
8:00
SEP F
0.1
0.3
0.3
Consumer Price Index (% YoY)
7:00
SEP
-0.8
-1.0
-1.0
NO
Trade Balance, NOK bln
8:00
SEP
24.9
na
na
CPI (Core Index) (% MoM)
7:00
SEP
0.1
0.1
na
EUR
Euro area CPI - Core (% YoY)
9:00
SEP
1.3
1.3
1.2
CPI (Core Index) (% YoY)
7:00
SEP
0.4
0.3
na
Euro area CPI (% MoM)
9:00
SEP
0.3
0.1
0.1
CPI (EU Harmonised) (% MoM)
7:00
SEP
0.4
-0.3
-0.2
Euro area CPI (% YoY)
9:00
SEP
-0.2
-0.3
-0.3
IT
US
Consumer Price Index (% MoM)
12:30
SEP
0.4
0.3
0.2
Consumer Price Index (% YoY)
12:30
SEP
-1.5
na
-1.4
SEP
0.1
0.1
0.1
SEP
1.4
na
1.4
CPI (EU Harmonised) (% YoY)
7:00
SEP F
-0.8
-1.0
-1.0
NO
Existing Homes (% QoQ)
8:00
3Q
5.3
na
na
UK
Avg Earnings ex bonus (% 3M/YoY)
8:30
AUG
2.2
1.9
1.9
CPI Ex Food & Energy (% MoM)
12:30
Avg Earnings inc bonus (% 3M/YoY)
8:30
AUG
1.7
1.2
1.4
CPI Ex Food & Energy (% YoY)
12:30
Claimant Count Rate, %
8:30
SEP
5
5.1
5.1
Continuing Claims, K
12:30
OCT-3
Claimant Count Change, K
8:30
SEP
24.4
25
25.0
Initial Jobless Claims, K
12:30
OCT-10
521
na
525
ILO Unemployment Rate (% 3mths)
8:30
AUG
7.9
8.3
8.0
Empire Manufacturing
12:30
OCT
18.88
18.00
18.00
OCT
14.1
14.0
12.0
Manu.Unit Wage Cost (% 3M/YoY)
8:30
AUG
4.3
na
na
Philadelphia Fed.
14:00
EUR
Euro area Ind. Prod. s.a. (% MoM)
9:00
AUG
-0.3
3.5
0.8
Euro area Ind. Prod. w.d.a. (% YoY)
9:00
AUG
-15.9
-12.4
-15.8
6:35
US
MBA Mortgage Applications
11:00
OCT-9
16.4
na
na
Advance Retail Sales, %
12:30
SEP
2.7
-1.3
-2.1
SZ
Friday16Friday16-OctOct-2009 BOJ Governor Masaaki Shirakawa to Speak in Tokyo Retail Sales (Real) (% YoY)
7:15
AUG
1.0
na
na
IT
Trade Balance (Total), EUR mln
8:00
AUG
4107.0
na
na
Trade Balance Eu, EUR mln
8:00
AUG
2397.0
na
na
Current Account, EUR mln
9:05
AUG
3334.0
na
na
Euro area Trade Balance, EUR bln
9:00
AUG
12.6
na
na
Euro area Trade Balance s.a., EUR bln
9:00
AUG
6.8
na
na
Bank Canada CPI Core (% MoM)
11:00
SEP
0.1
na
0.1 1.3
NZ
IT SP
14
AU
Retail Sales Less Autos, %
12:30
SEP
1.1
0.3
0.2
Retail Sales Ex Auto & Gas, %
12:30
SEP
0.6
0.2
na
Import Price Index (% MoM)
12:30
SEP
2
na
0.2
Import Price Index (% YoY)
12:30
SEP
-15
na
-11.6
Business Inventories, %
14:00
AUG
-1
na
-0.8
Minutes of Sept. 23 FOMC Meeting
18:00
Consumer Prices (% QoQ)
21:45
3Q
0.6
na
0.8
Consumer Prices (% YoY)
21:45
3Q
1.9
na
1.1
Thursday15 Thursday1515-OctOct-2009 Bank of Italy Releases Quarterly Economic Bulletin House Price Index (% QoQ)
13 October 2009
JN
EUR CA
US 3Q
-1.9
na
na
Bank Canada CPI Core (% YoY)
11:00
SEP
1.6
na
Consumer Price Index (% MoM)
11:00
SEP
0
na
0.0
Consumer Price Index (% YoY)
11:00
SEP
-0.8
na
-0.9
Net Long-term TIC Flows, USD bln
13:00
AUG
15.3
na
na
Total Net TIC Flows, USD bln
13:00
AUG
-97.5
na
na
Capacity Utilization, %
13:15
SEP
69.6
70.0
69.7
US Natural US Natural Gas Drivers
ECONOMIC INDICATORS
Industrial Production, %
13:15
SEP
0.8
0.3
0.1
U. of Michigan Confidence
14:00
OCT P
73.5
75.0
73.5
US Natural Gas Drivers
13 October 2009 15
TRADING CONTACTS
Trading Conta cts
COMMODITIES RESEARCH Head Head Dr. Frederic Lasserre
COMMODITY MARKETING
(33) 1 42 13 44 06
Paris Carbon & Coal Dr. Emmanuel Fages
Energy Special Advisor Sadek Boussena
(33) 1 42 13 30 29
(33) 1 42 13 57 03
(33) 1 42 14 59 11
London Cross Commodity Technical Analysis Stephanie Aymes (44) 207 762 58 98 Oil & Products Michael Wittner
(44) 207 762 57 25
Energy [email protected] Metals, Steel [email protected] [email protected] Investors [email protected]
Houston
(33) 1 42 13 90 35
Energy [email protected] (33) 1 42 13 69 59
London Energy, Plastics [email protected]
(44) 207 867 87 21
Plastics & Steel Specialist Sebastian Castelli
(44) 207 762 52 75
Metals [email protected]
(44) 207 867 87 21
Metals David Wilson
(44) 207 762 53 84
Energy [email protected]
(1) 212 278 56 08
Base Metals, Steel [email protected]
(1) 212 278 56 61
Precious Metals [email protected]
(1) 212 278 56 61
Plastics [email protected]
(1) 212 278 56 08
Investors [email protected]
(1) 212 278 62 55
Email: Please click on the analyst name ([email protected])
13 October 2009
(1) 403 698 89 10
HongHong-Kong Energy, Metals, Steel [email protected]
New York
(1) 212 278 57 36
(1) 713 759 63 60
Calgary
(44) 207 762 56 03
US Natural Gas Laurent Key
Energy [email protected]
(33) 1 42 13 88 10
Cross Commodity Strategy Jesper Dannesboe
New York
16
(33) 1 42 13 88 10
Paris
Oil & Products / Cross Commodity Strategy Remy Penin (33) 1 42 13 55 74 Agricultural Commodities Emmanuel Jayet
Head Xavier Lannegrace
(852) 2166 5515
Société Générale Corporate & Investment Banking Tours Société Générale 17, cours Valmy 92972 Paris - La Défense Cedex France www.commodities.sgcib.com
US Natural Gas Drivers
DISCLAIMER
The information herein is not intended to be an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities and including any expression of opinion, has been obtained from or is based upon sources believed to be reliable but is not guaranteed as to accuracy or completeness although Société Générale (SG) believe it to be fair and not misleading or deceptive. SG, and their affiliated companies in the SG Group, may from time to time deal in, profit from the trading of, hold or act as market-makers or act as advisers, brokers or bankers in relation to the securities, or derivatives thereof, of persons, firms or entities mentioned in this document or be represented on the board of such persons, firms or entities. Employees of SG, and their affiliated companies in the SG Group, or individuals connected to them may from time to time have a position in or be holding any of the investments or related investments mentioned in this document. SG and their affiliated companies in the SG Group are under no obligation to disclose or take account of this document when advising or dealing with or for their customers. The views of SG reflected in this document may change without notice. To the maximum extent possible at law, SG does not accept any liability whatsoever arising from the use of the material or information contained herein. Dealing in warrants and/or derivative products such as futures, options, and contracts for differences has specific risks and other significant aspects. You should not deal in these products unless you understand their nature and the extent of your exposure to risk. This research document is not intended for use by or targeted at retail customers. Should a retail customer obtain a copy of this report they should not base their investment decisions solely on the basis of this document but must seek independent financial advice. Important Notice: The circumstances in which this publication has been produced are such (for example because of reporting or remuneration structures or the physical location of the author of the material), that it is not appropriate to characterise it as independent investment research as referred to in European MIF directive and that it should be treated as a marketing material even if it contains a research recommendation (« recommandation dinvestissement à caractère promotionnel »). This publication is also not subject to any prohibition on dealing ahead of the dissemination of investment research. However, it must be made clear that all publications issued by SG will be clear, fair, and not misleading. Analyst Certification: Each author of this research report hereby certifies that the views expressed in the research report accurately reflect his or her personal views about any and all of the subject securities or issuers. Notice to French Investors: This publication is issued in France by or through Société Générale ("SG") which is authorised by the CECEI and regulated by the AMF (Autorité des Marchés Financiers). Notice to UK Investors: This publication is issued in the United Kingdom by or through Société Générale ("SG") London Branch which is regulated by the Financial Services Authority ("FSA") for the conduct of its UK business. Notice to US Investors: This report is issued solely to major US institutional investors pursuant to SEC Rule 15a-6. Any US person wishing to discuss this report or effect transactions in any security discussed herein should do so with or through SG Americas Securities, LLC to conform with the requirements of US securities law. SG Americas Securities, LLC, 1221 Avenue of the Americas, New York, NY, 10020. (212) 278-6000. Some of the securities mentioned herein may not be qualified for sale under the securities laws of certain states, except for unsolicited orders. Customer purchase orders made on the basis of this report cannot be considered to be unsolicited by SG Americas Securities, LLC and therefore may not be accepted by SG Americas Securities, LLC investment executives unless the security is qualified for sale in the state. Notice to Japanese Investors: This report is distributed in Japan by Société Générale Securities (North Pacific) Ltd., Tokyo Branch, which is regulated by the Financial Services Agency of Japan. The products mentioned in this report may not be eligible for sale in Japan and they may not be suitable for all types of investors. Notice to Australian Investors: Société Générale Australia Branch (ABN 71 092 516 286) (SG) takes responsibility for publishing this document. SG holds an AFSL no. 236651 issued under the Corporations Act 2001 (Cth) ("Act"). The information contained in this newsletter is only directed to recipients who are aware they are wholesale clients as defined under the Act. http://www.sgcib.com. Copyright: The Société Générale Group 2009. All rights reserved.
US Natural Gas Drivers
13 October 2009 17
13 October 2009
Important Notice: The circumstances in which this publication has been produced are such that it is not appropriate to characterise it as independent investment research as referred to in European MIF directive and that it should be treated as a marketing material even if it contains a research recommendation (« recommandation dinvestissement à caractère promotionnel »).
US Natural Gas Drivers Editorial
2
Natural Gas Price Information
4
US NATURAL GAS SCOREBOARD Score
Weight
Market Fundamentals
2.9
60%
U.S. Demand
3.1
40%
Res/comm
4
55%
Industrial - US Economy
2
35%
Power generation (EG)
2
10%
2.0
30%
Domestic Production
1
60%
Canadian Imports
5
20%
LNG
2
20%
3.4
30%
Short-term expectations
4
40%
Long-term expectations
3
60%
Market signals
2.6
40%
Laurent Key
Hedge Funds
3
20%
+1 212 278 57 36 [email protected]
Implied Probability
1
20%
As of last week, funds are longer by 5,000 contracts. Total Open Interest is unchanged. With prices range bound at $4.8-4.9 , ATM vol. may end its decline and stay around 60%. A strong bearish skew on the Nov '09 contract.
Technical Analysis
3
40%
Bearish short-term, bullish medium term on a possible reverse head and shoulder pattern.
Global markets
3
20%
2.8
100%
Rising energy markets may provide a support to NG, but no clear correlation for the moment. A looser supply and demand balance may weigh on prices for the short term. However, flattening production adds a bullish skew for the medium term.
Natural Gas Price Information & Supply/Demand Balance 5 Supply Components
6
Demand Forecasts
7
Demand Breakdown & Inventory
8
Inventory & Withdrawal
9
Weather
10
Technical Analysis NatGas
11
US Natural Gas Forecasts - Last updated 25/09/09 12 Economic Indicators
13
Trading Contacts
16
Stephanie Aymes +44 207 762 58 98 [email protected]
U.S. Supply
Inventories (Storage)
THIS WEEK TREND
www.commodit www.commodities.sgcib.com
Comment Neutral: unexpected rise in production will offset stronger residential demand. Expected colder than normal temperatures in the Northeast and the Midwest are the only bullish factor. Up 2 Bcf/d last week with cool temperatures. The rising trend in res. demand should continue with expected colder than normal temps in high consuming area. Stable w/w but still more than 1 Bcf/d below pre-crisis levels. The seasonal decline in EG demand is compounded by less price-related coal-to-gas switching. Production is already back to H1 '09 levels, due to the combined effect of a strong cash market and pipelines returning from maintenance. A two-week increase of 1.4 Bcf/d, to 56.4 Bcf/d, as Gulf pipeline maintenances finish ahead of schedule. Current spot prices above $3.5 may result in increasing shale gas production for Oct. Rising Southeast output may already be offsetting depressed Rockies production. Down 0.3 Bcf/d last week, on increased domestic demand and declining production. Slightly up last week by 0.3 bcf/d. The completion of global liquefaction facilities, and rising US spot margins, will boost imports to more than1 Bcf/d for the coming winter. Bullish short-term on injection reports; bearish for the medium-term. Cold weather decreases daily injections: Thursday's EIA report expected at 54 Bcf . Next week in the 30-40 Bcf range, respectively 5 Bcf and 25 Bcf below the 5-yr average. Since domestic production may have plateaued at high levels, we expect a tighter supply-anddemand balance by end-of-March 2010. Neutral since inv. Levels will still be high. Bearish short-term, bullish medium term.
Scoring: 1 = strongly bearish bearish 2 = bearish 3 = neutral 4 = bullish 5 = strongly bullish
Important Notice: In relation to European MIF directive, this publication could not be characterised as independent investment research. Please refer to disclaimer on last page.
EDITORIAL
Editorial
A fundamentally bear market, but only for the short term. Two Southeast supply area pipelines, recently back from maintenance, have boosted output to Q1 09 highs. Total US dry NG production jumped to 56.4 Bcf/d from 55 Bcf/d by the end-ofSept. The two pipelines, Fayetteville and Greenville laterals, bring natural gas from the Woodford and Fayetteville shale plays to the Texas Gas system for exports to the Midwest and Mid-Atlantic consuming areas. The the Arkoma (Arkansas Oklahoma) basin flow which include the Woodford shale and part of the Fayetteville shale - has jumped 0.7 Bcf/d from Sep 27. It now sits at 2.6 Bcf/d as of yesterday. About 60% of the total Arkoma basin gross production can be monitored with this sample, so the increase in output in this region may in fact be more than 1 Bcf/d. This increase in production is bearish for the short-term, until more winter demand rebalances the market. The total count of drilling application permits for September suggests that the US output should remain steady for the next month and then start rising again, though at a slower pace than by H2 08. This contradicts SG researchs previous forecast of a mid-December 2009 rebound. Arkansas horizontal drilling permit application count peaked in August 2009 at 152 and was down to 114 for September. After 12 days in October, the count sits at 52, suggesting that total October applications may reach August levels. This increase will be reflected in total Fayetteville shale output as early as midNovember. The situation is similar to Louisianas Haynesville shale: Drilling application count peaked at 70 in July and fell by 43% in August. It remained steady m/m for September at about 40. It now sits at 22
2
13 October 2009
after 12 days in October, possibly the first application count increase since last summer. The Rockies and Pennsylvania are the only areas to have increases in horizontal drilling permit applications for September. The one exception is Colorado, where September permit application count is down to 72 from 534 in July 09. Colorado production should continue to head south for the near term mainly due to concerns over the environmental cost of shale extraction. The Rockies remain the region most hurt by the 2009 price decline, due to higher marginal production costs than in the rest of the US. Southeast horizontal drilling application count
350
Ar - Vertical
Ar - Horizontal
La - Vertical
La - Horizontal
300 250 200 150 100 50 0 Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Source: ZDM, Inc, SG Commodities Research
Overall, US production is now expected to remain at high levels, since increases in Southeast and Pennsylvania output will offset decreases in the Rockies. Nov 09 prices should then correct to the downside, despite the expected below-normal temperatures for the next 11 days. The resulting increase in residential demand should impact the cash market, not futures, but at least will keep storage facilities from high congestion-related pressure issues.
US Natural Gas Drivers
EDITORIAL
A tighter supply-and-demand balance should arise later in the winter, after the market: 1/ experiences the first withdrawals of the heating season, and 2/ gets a better view of Canadian imports. The November temperature forecast is seasonal, which will spur a consequent y/y increase in residential demand due to the slowly improving economy. In Canada, cold weather and rising rig count suggest the start of the winter drilling season. In a few weeks, the market will have a better idea of how much depletion in conventional production fields is hurting total Canadian output. For the short-term, Asia and Europe will remain the main spot LNG buyers, until a 2010 rebound in US imports. Given the current large contango along the curve, the expectation for this tighter winter supply-and-demand balance may already be priced in levels along the curve. To benefit from the expected medium term tighter S/D balance, SG Research recommends buying the March/April spread (Buy March, sell April) at the right time of course: The spread fell to 0 cents too early in the season, and then bounced back to 5 cents with the September rise on the front of the curve. With the October looser supply and demand balance, it is expected to fall back to below 0 cents. We see this move as a buying opportunity since the spread will have to return to high positive levels to encourage withdrawals, as winter gets underway.
US Natural Gas Drivers
Mar/April 2010 Spread (USD/MMBtu) 0.1
Daily Close
0.08 0.06 0.04 0.02 0 -0.02 -0.04 Jul-09
Aug-09
Sep-09
Source: NYMEX, SG Commodities Research
13 October 2009
3
NATURAL GAS PRICE INFORMATION
Natural G as Price I nformation
Spread
$ 35
$2 $1 $1 $0 -$ 1 -$ 1 -$ 2 -$ 2 -$ 3 -$ 3
$ 30
Heating Oil (Upper) Residual Fuel Oil (Lower) Price Range
$ 25
COT Data and Nearby Futures Prices (US$ per MMBTU)
$ 15 $ 10 $5
$ $ $ $ $ $ $ $ $
Source: NYMEX, SG Commodities Research
Source: US CFTC, NYMEX, SG Commodities Research
Volatility Forecasts
Implied Volatility
Probability Price end at this range by by end of Nov
Last Week
90
Current
20%
Last Month
80
15%
160
70
10%
60
Source: Bloomberg, SG Commodities Research
13 October 2009
Source: Bloomberg, SG Commodities Research
$6.95 to $7.25
$6.65 to $6.95
$6.35 to $6.65
$6.05 to $6.35
$5.75 to $6.05
$5.45 to $5.75
$5.15 to $5.45
$4.85 to $5.15
$4.55 to $4.85
$4.25 to $4.55
$3.95 to $4.25
$3.05 to $3.35
NOV12
AUG12
MAY12
FEB12
NOV11
AUG11
MAY11
FEB11
NOV10
Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09
20 AUG10
0
30 MAY10
40
0%
40
FEB10
80
Last Week
5%
50
NOV09
120
Current
$3.65 to $3.95
Impl. Vol
200
$3.35 to $3.65
Hist. Vol
16 14 12 10 8 6 4 2 0
Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-01
$0
Nearby Price
Source: NYMEX, SG Commodities Research
SG Vol Model
4
Futures & Options
'000 lots 100 50 0 -50 -100 -150 -200 -250 -300 -350
NYMEX Natural Gas Price
$ 20
Sep-09
Jul-09
Mar-09
May-09
Jan-09
Nov-08
Jul-08
Sep-08
May-08
Jan-08
Sep-07
Nov-07
Mar-08
Henry Hub Spot Henry Hub Nearby Futures Basis
Price $ 16 $ 14 $ 12 $ 10 $8 $6 $4 $2 $0
Competing Fuels & Nat Gas Prices (US$ per MMBTU)
Jan-02
Natural Gas Prices and Basis (US$ per MMBTU)
Source: SG Commodities Research
US Natural Gas Drivers
NATURAL GAS PRICE INFORMATION & SUPPLY/DEMAND BALANCE
Natural G as Price I nformation & Supply/Dem and B ala nce
UK
UK + cost of shipping
Source: NYMEX, SG Commodities Research
Source: Bloomberg, SG Commodities Research
Source: NYMEX, SG Commodities Research
Supply and Demand (Bcf/d) (Bcf/d)
Net Supply and Demand
Demand in Bcf/d (w/o Bal. Items w/o Mexican Exports)
SG Supply Estimate
2006-2007
SG Demand Estimate
65
30
55
20
45
10
2007-2008
2008-2009
2006-2007
2007-2008
Oct-09
Sep-09
Aug-09
Jul-09
JUL11 MAY12 MAR13 JAN14 NOV14
Jun-09
3 NOV09 SEP10
US
16 14 12 10 8 6 4 2 0 May-09
Last Week
Apr-09
Last Month
Mar-09
Latest
Feb-09
Feb-13
Nov-12
May-11
Aug-12
4 Feb-12
-1.0 May-12
5
Nov-11
0.0
Aug-11
6
Feb-11
1.0
Nov-10
7
Aug-10
2.0
May-10
8
Feb-10
3.0
Nov-09
9
Jan-09
Last Month
Dec-08
Last Week
4.0
US, UK + Shipping Natural Gas Prices (US$ per MMBTU)
Nov-08
Latest
Forward Curves
Oct-08
Spread NBP (UK) - Henry Hub (US) (US$ per MMBTU)
2008-2009
75 65 55 45
0
35 25 20-Jun
35
-10 20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
US Natural Gas Drivers
20-Oct
20-Jun
25 20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
20-Oct
20-Jun
20-Jul
20-Aug
20-Sep
20-Oct
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
13 October 2009
5
SUPPLY COMPONENTS
Supply Compo ne nts
Supply (Bcf/d, incl. netting of Mexican Exports) 2006-2007
2007-2008
Domestic Production (Bcf/d)
2008-2009
65 63 61 59 57 55 53 51 49 47
2006-2007
Net Imports (Bcf/d)
2007-2008
2008-2009
2006-2007
2007-2008
2008-2009
16
53 51
14
49 12
47 45
10
43 41
8
39 37
20-Jun
20-Jul
20-Aug
20-Sep
20-Oct
20-Jun
6 20-Jul
20-Aug
20-Sep
20-Oct
20-Jun
20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
Net Imports from Canada (Bcf/d)
LNG Sendout (Bcf/d)
Rig Counts
2006-2007
2007-2008
2008-2009
12
2006-2007
2007-2008
2008-2009
4
North America
US
20-Oct
Canada
2000
11 10
1600
3
1200
9 8
2
800
7 6
400
1
4 20-Jun
0 20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
6
13 October 2009
20-Oct
20-Jun
20-Jul
20-Aug
20-Sep
Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
20-Oct
20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09
0
5
Source: Baker Hughes, SG Commodities Research
US Natural Gas Drivers
DEMAND FORECASTS
Dema nd Forec asts
LNG Sendout by Location (MMcf/d) 3000 2500
Lower 48 States (Observed) Demand Forecast (Bcf/d) 2008 Demand
Lake Charles
Excelerate
Elba Island
Cove Pt
Everett
Sabine Pass
2009 Demand
NorthEast (Observed) Demand Forecast (Bcf/d) (Bcf/d) 2008 Demand
Forecast
2009 Demand
Forecast
11
2000
42 9
1500 1000
38
7
500 5
0 Mar-07
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
34 29-Sep
4-Oct
9-Oct
14-Oct
19-Oct
29Sep
24-Oct
6Oct
13Oct
Source: Bentek Energy LLC, SG Commodities Research
Source: Bentek Energy LLC, SG Commodities Research
Source: Bentek Energy LLC, SG Commodities Research
SouthEast (Observed) Demand (Bcf/d)
Gulf (Observed) Demand (Bcf/d) (Bcf/d)
Midwest (Observed) Demand (Bcf/d)
2008 Demand
2009 Demand
2008 Demand
Forecast
2009 Demand
2008 Dem and
Forecast
2009 Dem and
20Oct
Forecast
13
6
8
5
12
4
7
11
3 2
6
10
1 5 29-Sep
4-Oct
9-Oct
14-Oct
Source: Bentek Energy LLC, SG Commodities Research
US Natural Natural Gas Drivers
19-Oct
24-Oct
0 29-Sep
9
4-Oct
9-Oct
14-Oct
Source: Bentek Energy LLC, SG Commodities Research
19-Oct
24-Oct
29-Sep
4-Oct
9-Oct
14-Oct
19-Oct
24-Oct
Source: Bentek Energy LLC, SG Commodities Research
13 October 2009
7
DEMAND BREAKDOWN & INVENTORY
Dema nd Brea kdown & I nv entory
West (Observed) Demand (Bcf/d) 2008 Demand
Power Demand (Bcf/d)
2009 Demand
Industrial Demand (Bcf/d)
Power 2006 Power 2008
Forecast
Power 2007 Power 2009
12
Industrial 2006 Industrial 2008
Industrial 2007 Industrial 2009
20
35
19
11 25
18 17
10
15
16
9 29-Sep
5
4-Oct
9-Oct
14-Oct
19-Oct
24-Oct
15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Bentek Energy LLC, SG Commodities Research
Source: Bentek Energy LLC, SG Commodities Research
Residential/Commercial Demand (Bcf/d)
US Working Gas Inventory (Bcf)
Eastern Region Gas Inventory (Bcf)
Res/Comm/Bal 2006 Res/Comm/Bal 2008
Res/Comm/Bal 2007 Res/Comm/Bal 2009
70
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2008
2009
2008
2009
4 000
2 500
3 000
2 000
60 50 40
1 500 2 000
30
1 000
20
1 000
500
10 0
0
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Bentek Energy LLC, DOE EIA, SG Commodities Research
8
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Bentek Energy LLC, SG Commodities Research
13 October 2009
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: DOE EIA, SG Commodities Research
Jan FebMar AprMay Jun Jul Aug Sep Oct NovDec Source: DOE EIA, SG Commodities Research
US Natural Gas Drivers
INVENTORY & WITHDRAWAL
Inve ntory & Withdra wal
Western Region Gas Inventory (Bcf)
Producing Region Gas Inventory (Bcf)
Total Lower 48 States Injection/Withdrawal (Bcf)
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2008
2009
2008
2009
2008
2009
1 400 500
150 100 50 0 -50 -100 -150 -200 -250 -300
1 200 1 000
400
800
300
600 400
200
200
100
0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: DOE EIA, SG Commodities Research
Source: DOE EIA, SG Commodities Research
Source: DOE EIA, SG Commodities Research
Producing U.S. Region Injection/Withdrawal (Bcf)
Eastern Region Injection/Withdrawal (Bcf)
Western U.S. Region Injection/Withdrawal (Bcf)
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2004-2008 Range
2004-2008 Average
2008
2009
2008
2009
2008
2009
100
30 20
100 50
50
10 0 -10 -20
0 0
-50 -100
-50
-150
-100
-30 -40
-200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: DOE EIA, SG Commodities Research
US Natural Gas Drivers
Jan FebMar Apr May Jun Jul Aug Sep Oct Nov Dec Source: DOE EIA, SG Commodities Research
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: DOE EIA, SG Commodities Research
13 October 2009
9
WEATHER
We ather
Actual v Normal HDD in U.S.
Actual v Normal CDD in U.S.
Normal HDD
Normal CDD
Actual HDD
250
% Difference from Normal
Actual CDD
70
140 120 100 80 60 40 20 0 Aug-09
Feb-09
May-09
Nov-08
Jun-08
Aug-08
Dec-07
Mar-08
Jun-07
Sep-07
Dec-06
20 Dec-05
Aug-09
Feb-09
May-09
Nov-08
Jun-08
Aug-08
Dec-07
Mar-08
Jun-07
Sep-07
Dec-06
Mar-07
Jun-06
Sep-06
Dec-05
Mar-06
0
30
Mar-07
50
40
Jun-06
100
50
Sep-06
150
60
Mar-06
200
10 0 14-Oct
15-Oct
16-Oct
17-Oct
Source: Bloomberg, SG Commodities Research
Source: Bloomberg, SG Commodities Research
Source: Dominion Energy Index, Dominion
Heating/Cooling Demand Forecast - Central
Heating/Cooling Demand Forecast - Eastern
Heating/Cooling Demand Forecast - Western
% Difference from Normal
% Difference from Normal Great Lakes
Great Plains
Lower Mississippi
200 150 100 50 0 -50 14-Oct
15-Oct
16-Oct
Source: Dominion Energy Index, Dominion
10
Heating/Cooling Demand Forecast (U.S)
13 October 2009
17-Oct
18-Oct
Mid-Atlantic
New England
18-Oct
% Difference from Normal Pacific
South Atlantic
450 400 350 300 250 200 150 100 50 0 -50
Rocky Mountains
Southwest
80 60 40 20 0 -20 -40 -60 14-Oct
15-Oct
Source: Dominion Energy Index, Dominion
16-Oct
17-Oct
18-Oct
14-Oct
15-Oct
16-Oct
17-Oct
18-Oct
Source: Dominion Energy Index, Dominion
US Natural Gas Drivers
TECHNICAL ANALYSIS NATGAS
ch nic al Analysis NatGas
TECHNICAL ANALYSIS SNAPSHOT
NATURAL GAS NYMEX Technical Analysis Snapshot Last week at a glance…. NAT.GAS OCT09 OCT09 rallied higher than the third target at 4.42. 4.42 We turn neutral and analyze the NOV09 NOV09 contract.
NAT.GAS NOV09
Next 3 months :
Direction Resistances Supports
8, 8.70/8.80 2.40, 1.95
STOPSTOP-LOSS
6.726.72-3.62/50
Next 3 weeks : Direction
Sentiment & Conviction
3 rd
3 taking profit nd
Resistances
2
6.20
taking profit
5.85
1st taking profit
5.50
Strengthening level Buying level 5.13/5.20 STOPSTOP-LOSS 4.35/4.25 Selling level Strengthening level 1st taking profit Supports
NAT. GAS NOV09
Neutral between 5.13/20 and 4.35/4.25
Graphic elements
Key graphic levels at 4.25 and 5.13/5.50 5.13-4.25 5.50
Indicators
Elliott count 6.72-3.50
US Natural Gas Drivers
3.62
3rd taking profit
3.50
Last price Risk/Reward
4.56 USD /MMBtu NA
Source: SG Commodities Research
Possible bullish pattern (Inverse Head and Shoulders) Tops of May/June They hit key resistances and are at support Hit the long-term resistance but is testing the support at 50% Range
-14-day RSI
3.87
2nd taking profit
Are the limits to watch
Expected direction - bullish then Risk/Reward = expected gain / known risk = (1st taking profit - buying level) / (buying level - stop-loss)
Expected direction - bearish hen Risk/Reward = expected gain / known risk = (selling level - 1st taking profit) / (stop-loss - selling level)
Expected direction - sideways
Sentiment & Conviction
1: Very Bearish
then Risk/Reward = Not Available
2: Bearish
3: Neutral
4: Bullish
5: Very Bullish
13 October 2009 11
US NATURAL GAS FORECASTS - LAST UPDATED 25/09/09
US Natur al Gas Forecasts - L ast updated 2 5/0 9/0 9
SG US Natural Gas Price Past/Forecasts Henry Hub Spot Natural Gas Wellhead Price Residential Sector Commercial Sector Industrial Sector
US$/MMBTU US$/MMBTU US$/MMBTU US$/MMBTU US$/MMBTU
2008 9.1 8.1 15.2 12.5 9.6
1Q 09 4.48 4.14 11.60 10.15 6.23
2Q 09 3.93 3.53 12.22 9.29 4.99
3Q 09 3.33 2.97 12.04 7.47 4.01
4Q 09 3.75 3.24 9.38 7.64 4.52
2009 3.87 3.44 11.25 8.57 4.89
1Q 10 5.13 4.36 9.82 8.59 5.89
2Q 10 5.80 5.15 12.61 9.96 6.40
3Q 10 6.63 5.93 18.19 11.89 7.17
4Q 10 6.25 5.47 12.57 10.50 6.99
2010 5.95 5.23 13.32 10.23 6.60
2008 63.5 8.6 18.2 18.2
1Q 09 71.88 38.03 17.54 16.31
2Q 09 46.74 12.15 16.16 18.44
3Q 09 48.55 7.22 16.20 25.13
4Q 09 63.69 29.47 17.67 16.55
2009 57.72 21.72 16.89 19.11
1Q 10 75.31 40.01 18.65 16.65
2Q 10 48.03 11.87 17.68 18.49
3Q 10 49.92 7.90 17.08 24.94
4Q 10 64.71 30.22 17.75 16.74
2010 59.49 22.50 17.79 19.20
2008 55.1 8.1 2837
1Q 09 56.91 7.88 1668.00
2Q 09 56.91 6.76 2775.00
3Q 09 56.25 7.78 3738.00
4Q 09 55.88 7.31 3102.00
2009 56.49 7.43 3102.00
1Q 10 55.34 8.21 1524.00
2Q 10 55.38 7.06 2395.00
3Q 10 55.73 8.93 3288.00
4Q 10 56.05 8.29 2744.00
2010 55.63 8.12 2744.00
Source : Forecast : SG Commodities Research - Actual : DOE EIA data
SG US Demand forecasts (Bcf) Total US Res/Comm Sector Industrial Sector Electricity Sector Source : Forecast : SG Commodities Research - Actual : DOE EIA data
SG US Supply Supply forecasts (Bcf) Dry Gas Production Net Imports of Natural Gas Working Gas Storage (end of period) Source : Forecast : SG Commodities Research - Actual : DOE EIA data
12
13 October 2009
XXXXXX YYYYYYYY
ECONOMIC INDICATORS
Economic Indi cators
Economic indicators GMT
Period
Last
SG Fcst
Cons
Actual FDI YTD (% YoY)
SEP
-17.5
na
na
Foreign Exchange Reserves, USD
SEP
2131.61
na
na
Money Supply - M2 (% YoY)
SEP
28.5
na
28.4
New Yuan Loans, bln
SEP
410.4
na
420.0
AUG
6.8
na
9.7
SEP
5.4
na
5.4
During the week CH
JN
US
Zew Survey (Econ. Sentiment) White House's Romer Speaks to Economists in St. Louis Fed's Kohn Speaks to Economists in St. Louis New York Fed's Dudley Speaks to International Bankers in NYC ABC Consumer Confidence
9:00
OCT
57.7
50
59.0
OCT-11
-45.0
na
na
12:30 17:00 17:15 21:00
BOJ to Hold Regular Policy Board Meeting Monday12Monday12-OctOct-2009
IN
Industrial Production (% YoY)
SW
AMV Unemployment Rate, % Treasury's Krueger Speaks to Economists in St. Louis Retail Sales (% MoM)
21:45
AUG
-0.5
na
0.5
Retail Sales Ex-Auto (% MoM)
21:45
AUG
-0.5
na
0.5
Business Climate Index
3Q
115.9
na
na
Entrepreneur Confidence Index
3Q
110.2
na
na
US NZ
8:00 17:00
Tuesday13Tuesday13-OctOct-2009 CH UK
BRC Retail Sales Monitor (00:01 BST) RICS House Price Balance, % (00:01 BST)
23:01
SEP
10.7
na
15.0
JN
Bank Lending (% YoY) (00:50 BST)
23:50
SEP
1.8
na
1.7
Bank Lending Banks (% YoY) (00:50 BST)
23:50
SEP
1.9
na
Money Stock M2 (% YoY) (00:50 BST)
23:50
SEP
2.8
na
2.9
BoJ Monetary Policy Meeting
4:00
Consumer Price Index (% MoM)
6:45
SEP
0.5
-0.1
-0.1
Consumer Price Index (% YoY)
6:45
SEP
-0.2
-0.2
-0.2
CPI - EU Harmonised (% MoM)
6:45
SEP
0.6
0.0
0.0
CPI - EU Harmonised (% YoY)
6:45
SEP
-0.2
-0.2
-0.3
FR
23:01
SEP
CPI Ex Tobacco Index
6:45
SEP
118.41
118.35
na
Current Account, EUR bln
6:45
AUG
-1.2
na
na
SP
House transactions (% YoY)
7:00
AUG
-20.3
na
na
SW
CPI - Headline Rate (% MoM)
7:30
SEP
0.2
na
0.4
CPI - Headline Rate (% YoY)
7:30
SEP
-0.8
na
-1.4
Core CPI (% YoY)
8:30
SEP
1.8
na
1.7
CPI (% MoM)
8:30
SEP
0.4
0.1
0.2
CPI (% YoY)
8:30
SEP
1.6
1.1
1.3
DCLG House Prices (% YoY)
8:30
AUG
-8.3
na
na
RPI (% YoY)
8:30
SEP
-1.3
na
-1.5
UK
GE
RPI Ex Mort Int.Payments (% YoY)
8:30
SEP
1.4
na
1.2
Zew Survey (Current Situation)
9:00
OCT
-74
-68
-68.3
US Natural Gas Drivers
13 October 2009 13
ECONOMIC INDICATORS
Economic indicators GMT
House Price Index (% YoY) RBA Governor Stevens Speaks in Perth (00:30 BST) Capacity Utilization (% MoM)
23:30
-21
Industrial Production (% MoM)
na
-15.0
15.70
na
-17.00
0.1
0.1
0.1
0.0
na
0.1
Period
Last
SG Fcst
Cons
Exports (% YoY)
SEP
-23.4
na
Imports (% YoY)
SEP
-17
Trade Balance, USD bln
SEP
JN
Wednesday14Wednesday14-OctOct-2009 CH
JN
SP
BOJ Target Rate, %
EUR
3Q
-8.2
na
na
4:30
AUG F
3.9
na
na
4:30
AUG F
1.8
na
na
Industrial Production (% YoY)
4:30
AUG F
-18.7
na
na
BOJ Monthly Report
5:00
EU 25 New Car Registrations, %
6:00
SEP
3.3
na
na
ECB Publishes Monthly Report
8:00
OCT
Domestic CGPI (% MoM) (00:50 BST)
23:50
SEP
Domestic CGPI (% YoY) (00:50 BST)
23:50
SEP
-8.5
na
-7.9
CPI (NIC incl. tobacco) (% MoM)
8:00
SEP F
0.3
-0.2
-0.2
Consumer Confidence
5:00
SEP
40.4
na
41.3
CPI (NIC incl. tobacco) (% YoY)
8:00
SEP F
0.1
0.2
0.2
Consumer Confidence Households
5:00
SEP
40.1
na
na
CPI - EU Harmonized (% MoM)
8:00
SEP F
0.2
0.6
0.6
Consumer Price Index (% MoM)
7:00
SEP
0.3
-0.2
-0.3
CPI - EU Harmonized (% YoY)
8:00
SEP F
0.1
0.3
0.3
Consumer Price Index (% YoY)
7:00
SEP
-0.8
-1.0
-1.0
NO
Trade Balance, NOK bln
8:00
SEP
24.9
na
na
CPI (Core Index) (% MoM)
7:00
SEP
0.1
0.1
na
EUR
Euro area CPI - Core (% YoY)
9:00
SEP
1.3
1.3
1.2
CPI (Core Index) (% YoY)
7:00
SEP
0.4
0.3
na
Euro area CPI (% MoM)
9:00
SEP
0.3
0.1
0.1
CPI (EU Harmonised) (% MoM)
7:00
SEP
0.4
-0.3
-0.2
Euro area CPI (% YoY)
9:00
SEP
-0.2
-0.3
-0.3
IT
US
Consumer Price Index (% MoM)
12:30
SEP
0.4
0.3
0.2
Consumer Price Index (% YoY)
12:30
SEP
-1.5
na
-1.4
SEP
0.1
0.1
0.1
SEP
1.4
na
1.4
CPI (EU Harmonised) (% YoY)
7:00
SEP F
-0.8
-1.0
-1.0
NO
Existing Homes (% QoQ)
8:00
3Q
5.3
na
na
UK
Avg Earnings ex bonus (% 3M/YoY)
8:30
AUG
2.2
1.9
1.9
CPI Ex Food & Energy (% MoM)
12:30
Avg Earnings inc bonus (% 3M/YoY)
8:30
AUG
1.7
1.2
1.4
CPI Ex Food & Energy (% YoY)
12:30
Claimant Count Rate, %
8:30
SEP
5
5.1
5.1
Continuing Claims, K
12:30
OCT-3
Claimant Count Change, K
8:30
SEP
24.4
25
25.0
Initial Jobless Claims, K
12:30
OCT-10
521
na
525
ILO Unemployment Rate (% 3mths)
8:30
AUG
7.9
8.3
8.0
Empire Manufacturing
12:30
OCT
18.88
18.00
18.00
OCT
14.1
14.0
12.0
Manu.Unit Wage Cost (% 3M/YoY)
8:30
AUG
4.3
na
na
Philadelphia Fed.
14:00
EUR
Euro area Ind. Prod. s.a. (% MoM)
9:00
AUG
-0.3
3.5
0.8
Euro area Ind. Prod. w.d.a. (% YoY)
9:00
AUG
-15.9
-12.4
-15.8
6:35
US
MBA Mortgage Applications
11:00
OCT-9
16.4
na
na
Advance Retail Sales, %
12:30
SEP
2.7
-1.3
-2.1
SZ
Friday16Friday16-OctOct-2009 BOJ Governor Masaaki Shirakawa to Speak in Tokyo Retail Sales (Real) (% YoY)
7:15
AUG
1.0
na
na
IT
Trade Balance (Total), EUR mln
8:00
AUG
4107.0
na
na
Trade Balance Eu, EUR mln
8:00
AUG
2397.0
na
na
Current Account, EUR mln
9:05
AUG
3334.0
na
na
Euro area Trade Balance, EUR bln
9:00
AUG
12.6
na
na
Euro area Trade Balance s.a., EUR bln
9:00
AUG
6.8
na
na
Bank Canada CPI Core (% MoM)
11:00
SEP
0.1
na
0.1 1.3
NZ
IT SP
14
AU
Retail Sales Less Autos, %
12:30
SEP
1.1
0.3
0.2
Retail Sales Ex Auto & Gas, %
12:30
SEP
0.6
0.2
na
Import Price Index (% MoM)
12:30
SEP
2
na
0.2
Import Price Index (% YoY)
12:30
SEP
-15
na
-11.6
Business Inventories, %
14:00
AUG
-1
na
-0.8
Minutes of Sept. 23 FOMC Meeting
18:00
Consumer Prices (% QoQ)
21:45
3Q
0.6
na
0.8
Consumer Prices (% YoY)
21:45
3Q
1.9
na
1.1
Thursday15 Thursday1515-OctOct-2009 Bank of Italy Releases Quarterly Economic Bulletin House Price Index (% QoQ)
13 October 2009
JN
EUR CA
US 3Q
-1.9
na
na
Bank Canada CPI Core (% YoY)
11:00
SEP
1.6
na
Consumer Price Index (% MoM)
11:00
SEP
0
na
0.0
Consumer Price Index (% YoY)
11:00
SEP
-0.8
na
-0.9
Net Long-term TIC Flows, USD bln
13:00
AUG
15.3
na
na
Total Net TIC Flows, USD bln
13:00
AUG
-97.5
na
na
Capacity Utilization, %
13:15
SEP
69.6
70.0
69.7
US Natural US Natural Gas Drivers
ECONOMIC INDICATORS
Industrial Production, %
13:15
SEP
0.8
0.3
0.1
U. of Michigan Confidence
14:00
OCT P
73.5
75.0
73.5
US Natural Gas Drivers
13 October 2009 15
TRADING CONTACTS
Trading Conta cts
COMMODITIES RESEARCH Head Head Dr. Frederic Lasserre
COMMODITY MARKETING
(33) 1 42 13 44 06
Paris Carbon & Coal Dr. Emmanuel Fages
Energy Special Advisor Sadek Boussena
(33) 1 42 13 30 29
(33) 1 42 13 57 03
(33) 1 42 14 59 11
London Cross Commodity Technical Analysis Stephanie Aymes (44) 207 762 58 98 Oil & Products Michael Wittner
(44) 207 762 57 25
Energy [email protected] Metals, Steel [email protected] [email protected] Investors [email protected]
Houston
(33) 1 42 13 90 35
Energy [email protected] (33) 1 42 13 69 59
London Energy, Plastics [email protected]
(44) 207 867 87 21
Plastics & Steel Specialist Sebastian Castelli
(44) 207 762 52 75
Metals [email protected]
(44) 207 867 87 21
Metals David Wilson
(44) 207 762 53 84
Energy [email protected]
(1) 212 278 56 08
Base Metals, Steel [email protected]
(1) 212 278 56 61
Precious Metals [email protected]
(1) 212 278 56 61
Plastics [email protected]
(1) 212 278 56 08
Investors [email protected]
(1) 212 278 62 55
Email: Please click on the analyst name ([email protected])
13 October 2009
(1) 403 698 89 10
HongHong-Kong Energy, Metals, Steel [email protected]
New York
(1) 212 278 57 36
(1) 713 759 63 60
Calgary
(44) 207 762 56 03
US Natural Gas Laurent Key
Energy [email protected]
(33) 1 42 13 88 10
Cross Commodity Strategy Jesper Dannesboe
New York
16
(33) 1 42 13 88 10
Paris
Oil & Products / Cross Commodity Strategy Remy Penin (33) 1 42 13 55 74 Agricultural Commodities Emmanuel Jayet
Head Xavier Lannegrace
(852) 2166 5515
Société Générale Corporate & Investment Banking Tours Société Générale 17, cours Valmy 92972 Paris - La Défense Cedex France www.commodities.sgcib.com
US Natural Gas Drivers
DISCLAIMER
The information herein is not intended to be an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities and including any expression of opinion, has been obtained from or is based upon sources believed to be reliable but is not guaranteed as to accuracy or completeness although Société Générale (SG) believe it to be fair and not misleading or deceptive. SG, and their affiliated companies in the SG Group, may from time to time deal in, profit from the trading of, hold or act as market-makers or act as advisers, brokers or bankers in relation to the securities, or derivatives thereof, of persons, firms or entities mentioned in this document or be represented on the board of such persons, firms or entities. Employees of SG, and their affiliated companies in the SG Group, or individuals connected to them may from time to time have a position in or be holding any of the investments or related investments mentioned in this document. SG and their affiliated companies in the SG Group are under no obligation to disclose or take account of this document when advising or dealing with or for their customers. The views of SG reflected in this document may change without notice. To the maximum extent possible at law, SG does not accept any liability whatsoever arising from the use of the material or information contained herein. Dealing in warrants and/or derivative products such as futures, options, and contracts for differences has specific risks and other significant aspects. You should not deal in these products unless you understand their nature and the extent of your exposure to risk. This research document is not intended for use by or targeted at retail customers. Should a retail customer obtain a copy of this report they should not base their investment decisions solely on the basis of this document but must seek independent financial advice. Important Notice: The circumstances in which this publication has been produced are such (for example because of reporting or remuneration structures or the physical location of the author of the material), that it is not appropriate to characterise it as independent investment research as referred to in European MIF directive and that it should be treated as a marketing material even if it contains a research recommendation (« recommandation dinvestissement à caractère promotionnel »). This publication is also not subject to any prohibition on dealing ahead of the dissemination of investment research. However, it must be made clear that all publications issued by SG will be clear, fair, and not misleading. Analyst Certification: Each author of this research report hereby certifies that the views expressed in the research report accurately reflect his or her personal views about any and all of the subject securities or issuers. Notice to French Investors: This publication is issued in France by or through Société Générale ("SG") which is authorised by the CECEI and regulated by the AMF (Autorité des Marchés Financiers). Notice to UK Investors: This publication is issued in the United Kingdom by or through Société Générale ("SG") London Branch which is regulated by the Financial Services Authority ("FSA") for the conduct of its UK business. Notice to US Investors: This report is issued solely to major US institutional investors pursuant to SEC Rule 15a-6. Any US person wishing to discuss this report or effect transactions in any security discussed herein should do so with or through SG Americas Securities, LLC to conform with the requirements of US securities law. SG Americas Securities, LLC, 1221 Avenue of the Americas, New York, NY, 10020. (212) 278-6000. Some of the securities mentioned herein may not be qualified for sale under the securities laws of certain states, except for unsolicited orders. Customer purchase orders made on the basis of this report cannot be considered to be unsolicited by SG Americas Securities, LLC and therefore may not be accepted by SG Americas Securities, LLC investment executives unless the security is qualified for sale in the state. Notice to Japanese Investors: This report is distributed in Japan by Société Générale Securities (North Pacific) Ltd., Tokyo Branch, which is regulated by the Financial Services Agency of Japan. The products mentioned in this report may not be eligible for sale in Japan and they may not be suitable for all types of investors. Notice to Australian Investors: Société Générale Australia Branch (ABN 71 092 516 286) (SG) takes responsibility for publishing this document. SG holds an AFSL no. 236651 issued under the Corporations Act 2001 (Cth) ("Act"). The information contained in this newsletter is only directed to recipients who are aware they are wholesale clients as defined under the Act. http://www.sgcib.com. Copyright: The Société Générale Group 2009. All rights reserved.
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