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Gas Price Increases Continue Following EIA Storage Report


Natural gas storage inventories increased by 91 Bcf for the week ending May 18, according to the EIA’s weekly report. This injection is slightly lower than last week’s injection of 106 Bcf. However, it was roughly in line with market expectations. Natural gas prices are trading slightly higher than yesterday’s close with the prompt June contract trading at $2.94 per MMBtu, at time of writing.

Working gas storage inventories now sit at 1.63 Tcf, which is 804 Bcf below last year and 499 Bcf below the 5-year average. For the injection season this year to end at 3.79 Tcf, the same level as 2017, average weekly injections this summer must average 90 Bcf.

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 24, 2018.

  • Supply:

–        Dry gas production is up 0.8 Bcf/d week-on-week with the Northeast (0.6 Bcf/d) increasing production, as well as increases in production in the Southwest (0.2 Bcf/d). The Northeast increases are mainly due to the completion of maintenance on the Millennium Pipeline, which increased flows out of northeast Pennsylvania.

–        Canadian imports are up 0.1 Bcf/d week-on-week.

  • Demand:

–        Domestic natural gas demand decreased by 0.5 Bcf/d week-on-week. The power sector (-0.8 Bcf/d) decreases in consumption, while ResCom (0.2 Bcf/d) increases. This demand behavior is attributed to cooler temperatures over the last week. Industrial demand remained flat week-on-week.

–        LNG exports are down 0.4 Bcf/d and Mexico exports remained relatively flat week-on-week.

Total supply is up 0.9 Bcf/d and total demand is down 1.0 Bcf/d week-over-week. A stronger injection is expected next week. Last year’s injection for the same week was 81 Bcf while the 5-year average is 100 Bcf.

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