Natural Gas Storage Posts First Triple Digit Injection

Natural Gas Storage Posts First Triple Digit Injection

Natural gas storage inventories increased by 106 Bcf for the week ending May. 11, according to the EIA’s weekly report. This withdrawal was roughly in line with market expectations. Natural gas prices were trading slightly lower than yesterday’s close before the report came out and did not react strongly to the injection. The prompt June contract is trading at $2.80 at time of writing. Working gas storage inventories now sit at 1.54 Tcf, which is 821 Bcf below last year and 501 Bcf below the 5-year average.

See the chart below for projections of the end-of-season storage inventories as of November 1, the end of the injection season.

This Week in Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending May 17, 2018.

  • Supply:
    • Dry gas production is down 0.7 Bcf/d week-on-week with the Northeast (-0.8 Bcf/d) declining as Texas (+0.2 Bcf/d) increased production. The Northeast declines can mostly be attributed to maintenance on the Millennium Pipeline which significantly reduced flows out of northeast Pennsylvania for five days.
    • Canadian imports are up 0.3 Bcf/d week-on-week.
  • Demand:
    • Domestic natural gas demand increased by 1.5 Bcf/d week-on-week. The power sector (+2.2 Bcf/d) continues to increase consumption while ResCom (-0.7 Bcf/d) declines as cooling demand replaces heating demand with the change of seasons. Industrial demand remained flat week-on-week.
    • LNG exports are down 0.1 Bcf/d and Mexico exports also declined 0.1 Bcf/d week-on-week.
  • • Total supply is up 0.4 Bcf/d and total demand is up 1.5 Bcf/d week-over-week. A weaker injection is expected next week. Last year’s injection for the same week was 75 Bcf while the 5-year average is 91 Bcf.

 

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