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Gas Inventory at Deficit Heading Toward Summer Season


Natural gas storage inventories decreased 47 Bcf for the week ending March 15, according to the EIA’s weekly report. This draw meets the market expectation, which was an inventory decrease of 48 Bcf. This week’s report did come with revisions to the March 8 draws in the South Central region, reducing the draw from 204 Bcf to 200 Bcf for the week ending March 8.

Working gas storage inventories now sit at 1.143 Tcf, which is 315 Bcf below inventories at the same time last year and 556 Bcf below the five-year average.

At the time of this writing, the April 2019 contract was trading at $2.812/MMBtu, $0.008 below yesterday’s close of $2.820/MMBtu.

Winter is coming to an end, along with the withdrawal season, and inventories will need to play catch-up during summer 2019. All regions are at a deficit compared to the 2010 through 2018 average inventory for the same week as we enter the summer season. The recovery from this deficit will largely be determined by summer weather and the amount of gas needed for power burn. Another factor in recovering the deficit is additional LNG capacity coming to market, as Corpus Christi, Cameron, Elba Island, Sabine, and Freeport are expected to have trains come to market during summer 2019. The chart below shows inventory by region for the same week.

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

This Week in Fundamentals

The summary below is based on Bloomberg’s flow data and DI analysis for the week ending March 21, 2019.


  • Dry gas production increased 0.06 Bcf/d on the week. A decrease was observed in the South Central/Gulf region of ~0.23 Bcf/d. This drop was offset by gains in the East (+0.15 Bcf/d) and the Mountain (+0.14 Bcf/d) regions.
  • Canadian net imports increased 0.29 Bcf/d on the week.


  • Domestic natural gas demand decreased 0.33 Bcf/d week over week. Res/Com demand decreased 1.10 Bcf/d week over week, while Power and Industrial demand increased 0.33 Bcf/d and 0.44 Bcf/d, respectively.
  • LNG exports increased 0.30 Bcf/d, while Mexican exports fell 0.11 Bcf/d on the week.

Total supply is up 0.35 Bcf/d, while total demand decreased 0.14 Bcf/d week over week. With the gain in supply and the drop in demand, expect the EIA to report a weaker draw next week. The ICE Financial Weekly Index report is currently expecting a draw of 39 Bcf for next week. Last year, the same week saw a draw of 63 Bcf; the five-year average is 41 Bcf.

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