Gas Prices Fall Below $3, Another Strong Storage Withdrawal

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Natural gas storage inventories decreased by 46 Bcf for the week ended Nov. 17, per EIA. The Dec17 futures contract continues its downward trend after peaking on Nov 13 at $3.23 per MMBtu falling below the $3 mark earlier this morning. Following the storage release, gas prices remain trading down $0.037 to $2.98 per MMBtu, at time of writing.

Working gas storage inventories decreased to 3.726 Tcf, level 319 Bcf below last year and also below the 5-year average by 121 Bcf.

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

Gas Prices Fall Below , Another Strong Storage Withdrawal

 This Week In Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending 11/22..

  • Supply: dry gas production is down 245 MMcf/d week-on-week with losses reported in the Northeast and Gulf of Mexico. A fire at the Enchilada offshore oil platform operated by Royal Dutch Shell is responsible for about half of the declines while in the Northeast, losses were reported across multiple pipelines. Total production in November To-Date remain strong and 1.6 Bcf/d higher than October levels at 75.7 Bcf/d. Canadian imports also decreased this week by 290 MMcf/d.
  • Demand: residential/commercial demand is flat week-on-week while Power demand declines were offset by gains in the industrial and LNG export sectors. Power demand dropped by 560 MMcf/d, Industrial demand and LNG increased by 0.3 Bcf/d each.
  • Total supply is down 550 Bcf/d. Total demand is relatively flat, up 160 MMcf/d. Market remains short, therefore another large draw is expected next week.
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