Natural Gas Storage Report Injection Season Week 18 (Week Ending August 3, 2018)

The EIA’s reported injection of 46 Bcf was nearly right on target compared to the market expectation of 47 Bcf. Breaking the streak of three notably low builds in a row, this week could finally reflect a halt in the recent 18 cent rally that the September contract month has experienced, supplemented by surpassing two technical pricing hurdles and complementary warmer-than-normal weather over the past six trading days. With injections falling more in line with expectations and dry gas production consistently holding above 80 Bcf/d for multiple days in row, worries about the storage deficit have begun to ease with summer’s last few weeks ahead of us. The December, January, February, and March contract months may be trading over $3.00/MMBtu currently, but more robust injections over the course of the remainder of summer could see those future contracts dip back below that mark as we get closer to withdrawal season at the end of October.

Working natural gas in storage currently stands at 2,354 Bcf, which is 671 Bcf (22.2%) lower than this time last year and 572 Bcf (19.5%) lower than the five year average.

The September 2018 NYMEX Futures price began the day around $2.95/MMBtu prior to the report’s release, but has since slightly decreased to $2.94/MMBtu after the report was posted.

Outlook for the Balance of Storage Season:

The graph below compares historical 12, 24 and 36 month strip prices and storage levels for the past 5 years.

The following table shows the injection numbers we will need to average by week to hit selected historical levels:

The following two graphs show current natural gas in storage compared to each of the last 5 years and weekly storage averages and patterns.

The graph below shows the injections through the current week over the past 5 years.

Finally, the graphics below depicts the 6 to 10 day temperature range outlook from the National Weather Service.

Current Week’s Outlook

Future Outlook

Leave a Reply

Your email address will not be published. Required fields are marked *