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Bullish Storage Report, Gas Inventories Aimed to End at 3.8 Tcf

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Natural gas storage inventories increased by 58 Bcf for the week ended Sept. 22, per EIA. The report came in below most market expectations of an injection in the low 60s.

The new prompt month contract, Nov17, opened lower this morning but is back up and trading flat from yesterday following the bullish EIA report. Nov2017 is trading at $3.06 per MMBtu, at time of writing.

Working gas storage inventories increased to 3.466 Tcf, level 127 Bcf below last year. However, it remains 41 Bcf above the 5-year average.
See Drillinginfo EIA’s chart below. This graphic shows projections for end-of-season inventories as of Nov 1. Two scenarios are included for summer injections (April-Oct) that result in inventories between 3.83 Tcf and 3.88 Tcf.

Bullish Storage Report, Gas Inventories Aimed to End at 3.8 Tcf

This Week In Fundamentals
The summary below is based on PointLogic’s flow data and DI analysis for the week ending 9/28.

• Supply: dry gas production gave up all the gains from the prior week, down 0.5 Bcf/d to 74.1 Bcf/d. The losses were mainly in Texas and Gulf of Mexico, while production in the Northeast remained strong at over 24 Bcf/d. Canadian imports were also lower this week, down 100 MMcf/d. Total supply is down 0.6 Bcf/d.

• Demand: total demand had another weekly gain this week, up 0.7 Bcf/d lead by power and residential/commercial demand. After peaking last week, LNG exports are down 0.6 Bcf/d week-on-week. However, expect exports to increase in the coming weeks as Cheniere requested FERC immediate authorization to place online Train 4 of Sabine Pass.

• Total supply is down 0.6 Bcf/d, total demand is up 0.7 Bcf/d. Market is shorter again this week. A storage injection in the 50s Bcf is expected in next week’s EIA release, which compares to a 49 Bcf reported last year and the 5-year average of 87 Bcf.

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