Gas Prices Down as Inventories Decline by 29 Bcf Due to a Reclassification

Share

Natural gas storage inventories

decreased by 29 Bcf for the week ending March 30, according to the EIA’s weekly report. The EIA reported a 20 Bcf withdrawal and a non-flow-related adjustment that decreased working gas storage by another 9 Bcf in the South Central Nonsalt region. The 20 Bcf withdrawal was below market expectations. Natural gas prices are trading lower than yesterday’s close with the May contract trading at $2.66 per MMBtu at the time of writing.

Today’s storage withdrawal is lower than the 5-year average withdrawal of 27 Bcf, but last year saw an injection of 2 Bcf. Working gas storage inventories dropped to 1.35 Tcf, which is 697 Bcf below last year and 347 Bcf below the 5-year average.

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

Gas Prices Down as Inventories Decline by 29 Bcf Due to a Reclassification

This Week in Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending April 5, 2018.

  • Supply:
    • Dry gas production is down 0.1 Bcf/d week-on-week with the Northeast (-0.2 Bcf/d) and Rockies (-0.2 Bcf/d) declining while the Southeast (+0.2 Bcf/d) and Western (+0.1 Bcf/d) regions increased.
    • Canadian imports are up 0.3 Bcf/d week-on-week.
  • Demand:
    • Domestic natural gas demand is up 0.3 Bcf/d, with ResCom (+0.3 Bcf/d) and industrial (+0.2 Bcf/d) increasing while power declined (-0.2 Bcf/d).
    • Industrial gas consumption is showing an upward trend this year. Late last week EIA reported January industrial gas consumption at 24.8 Bcf/d, setting an all-time monthly record high for the second month in a row. December industrial consumption was 24.5 Bcf/d, and the previous record was 23.7 Bcf/d set in December 2016. States seeing the most gains are Louisiana, Texas, and Iowa.
    • LNG exports are up 0.6 Bcf/d and Mexico exports are up 0.4 Bcf/d week-on-week.
  • Total supply is up 0.3 Bcf/d, and total demand is up 2.3 Bcf/d. A larger withdrawal is expected next week. Last year saw an injection of 10 Bcf for the same week while the 5-year average is a 12 Bcf injection.
The following two tabs change content below.