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August 23 - The bond market has recently sent a clear signal to Treasury Secretary Bessant: dont try to sweep $40 trillion in U.S. Treasury bonds under the rug and pretend everything is fine. Bessant announced plans to increase long-term Treasury repurchases this fall, pledged to use the Treasurys vast "toolbox" to support the market, and discussed upcoming measures to curb the ever-expanding U.S. debt burden. John Arnold, a former Enron energy trader, billionaire, and founder of the philanthropic venture capital firm Arnold, said the summers bond market turmoil may ultimately be just "another quickly subsided episode," but the bigger concern is that the lack of change in the U.S. fiscal situation will persist until it finally triggers a crisis. Tracy Chan, a global portfolio manager at Brandiwin, said she is very nervous because Bessant has failed to curb long-term Treasury yields. The bond markets performance suggests that bond vigilantes still dont trust him. Bessant needs to do more to convince investors that the Trump administration is serious about U.S. fiscal issues, but talking about increasing revenue through tax increases or austerity measures before the November midterm elections will be unpopular.On August 23, according to the Wall Street Journal, Russian military officers flew from St. Petersburg to the Kaliningrad exclave last month. Western intelligence officials said these officers oversaw mobilization preparations and procedures for the regions residents, including specific details on how to house, supply, and arm mobilization personnel. Intelligence officials stated that the planning exercises in Kaliningrad were just one of many nationwide drills designed to prepare for a "call to arms." Officials said the Kremlin has not yet decided whether to actually carry out such an operation, and a decision is likely to be made after the parliamentary elections at the end of September. However, despite the slow and costly progress, Putins determination to seize the entire Donbas region of eastern Ukraine may force him to take action. Kaliningrad, the location of last months mobilization test exercises, has recently received increasing attention. Western intelligence officials have warned that the exclave could play a role in Moscows military plans.August 23 – According to the Jerusalem Post and Al Mayadeen TV, a senior Iranian official stated that Iran has been invited to join the Mecca Mutual Defense Agreement established earlier this month by Saudi Arabia, Turkey, and Pakistan. The invitation has not yet been officially confirmed by the Iranian Foreign Ministry or any of the three parties to the agreement. Mehdi Rahimi, head of the Islamic Consultative Conference News Agency, stated that Iran has received an invitation to join the Mecca Agreement, and the matter is under review. Rahimi added that countries in the region are "moving in the direction of seeking a regional security umbrella," and called this a victory for Iran, as it has long been advocating for this.On August 23, Syrian Transitional Government Foreign Minister Shibani stated in an interview with Reuters on the 22nd that Syria expects to resume negotiations with Israel soon on a security agreement, hoping the agreement will facilitate Israels withdrawal from Syrian territory. Shibani said that negotiations between Syria and Israel on a security agreement have been stalled since the outbreak of the US-Israel-Iraq conflict this year, but he anticipates they will resume. The United States is pressuring Israel to return to dialogue. Shibani also stated that the Syrian Transitional Government "currently does not trust Israel," but the current priority is to stop Israeli attacks, therefore "confidence-building measures" are needed. Communication between Syria and Israel was severed after the attack on Syrias Abu Zukur airbase on August 18.August 23 - According to foreign media reports, the US Navy is testing a new air-to-air missile capable of striking targets more than 290 miles (465 kilometers) away, significantly exceeding the range of other known similar weapons. The US Navy states that the AIM-424 "Malice" missile, developed by Raytheon, a subsidiary of RTX Corporation, is roughly the same size as the currently deployed AIM-120 "Advanced Medium-Range Air-to-Air Missile" (AMRAAM). This means the missile can be fitted into the internal weapons bays of F-35 and F-22 stealth fighters. Peter Layton, a former Royal Australian Air Force officer and visiting scholar at the Griffith Asia Institute, stated that while missiles with this range could be used to strike high-value aerial targets such as command aircraft or refueling aircraft, they may be even more valuable for defending ships.

Natural Gas Prices Are at Their June 2021 Lows As Bulls Retain $3 Support

Skylar Williams

Jan 20, 2023 10:44

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The depletion from natural gas storage in the United States was larger than anticipated, but it was insufficient to increase prices from 19-month lows.


The front-month February gas contract on the Henry Hub of the New York Mercantile Exchange decreased by 3.6 cents, or 1%, to $3.275 per million British thermal units (mmBtu) on Thursday. This was the lowest settlement for a front-month gas contract on the hub since June 22, 2021, when it closed at $3.258.


Earlier in Thursday's session, February gas prices hit a low of $3.203, narrowing the distance between a reduction to the $2 region to less than 20 cents. U.S. gas futures have not traded below $3 since May 2021. Their value has declined by about 20% since the beginning of 2023, and by 15.5% year-over-year.


Despite the Energy Information Administration's (EIA) forecast that U.S. utilities drew 82 billion cubic feet (bcf) from national gas storage last week for heating purposes — more than the 71 bcf draw projected by Investing.com experts — the price of natural gas continued to decrease.


John Kilduff, a partner at the New York-based energy hedge fund Again Capital, commented, "What's being asked of folks who are long on gas is quite a bit: that the weather quickly returns to winter-normal cold." This is something that gas bulls have no control over.


The short-term weather forecast is vague and even baffling. Major weather forecast models, such as the U.S.-based Global Forecast System (GFS) and the European Center for Medium-Range Weather Forecasts (ECMWF), foresee a cooling trend by the final week of January. In addition, above-average Gas-Weighted Degree Days (GWDDs) are expected to develop around January 25 and linger until February.


Despite this, the GFS is downplaying the severity of the impending winter weather event, depicting a fairly ordinary Arctic air mass as compared to the remarkable Arctic air mass that moved as far south as Houston, Texas, in late December, bringing temperatures as low as ten degrees.


Other weather models, such as the Canadian (GEM) and the CFSv2, predict temperatures of 80 degrees below zero in Siberia, which might reach the interior of the United States. Compared to the first half of January, when most locations saw record-low temperatures, the number of GWDDs during the period between January 18 and January 31 is the third highest for the time period over the past five years.


Meteorologist NatGasWeather noted in a Wednesday blog post on naturalgasintel.com:


"Overnight data sustains very light national demand over the next three days, light this weekend until the start of the following week, but solid demand for the week of January 26-31," Recent model runs were not as impressive in terms of the quantity of cold that would reach the United States, nor were they as active in advancing subfreezing air into the southern and eastern United States.


In a blog post published on the same website on Thursday, some analysts noted that production has been solid this month – above 100 bcf/d – while mild weather has lowered heating demand in large sections of the Lower 48 states.


An Analyst expert was quoted by naturalgasintel.com as saying, "Demand has underperformed significantly." The need for storage has dramatically decreased.


According to the website, the recent fall in gas supply has decreased storage capacity to 2,820 trillion cubic feet (tcf). This compares to the previous year's level of 2,839 tcf and the five-year average of 2,786 tcf.


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