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Injection Lower Than Expected, Prices Show Little Reaction


Natural gas storage inventories increased 25 Bcf, with an implied flow of 29 Bcf, for the week ending April 5, according to the EIA’s weekly report. This injection is well below the market expectation, which was an inventory increase of 38 Bcf. This week also came with reclassifications in the Pacific and South Central regions. In the Pacific, gas stocks showed a reclassification of a 1 Bcf decrease, and South Central stocks showed a 2 Bcf drop.

Working gas storage inventories now sit at 1.155 Tcf, which is 183 Bcf below inventories at the same time last year and 485 Bcf below the five-year average.

At the time of this writing, the May 2019 contract was trading at $2.689/MMBtu, $0.011 below yesterday’s close of $2.670/MMBtu. The little reaction to the bullish report shows that the market is content with injections at this point in the season. Prices are likely to show more volatility later in the season if inventory levels are low and injections are below expectations.

This injection season started much earlier than last year. Looking at the past two weeks for the same time last year, we had draws totaling 48 Bcf. This year, we have injections totaling 48 Bcf, nearly a 100 Bcf difference in inventories. The difference in inventories can mainly be attributed to the longer winter last year, which ran through most of April. With more injections expected throughout April 2019, prices will likely stay below $3/MMBtu as inventory levels close the gap on the five-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.

This Week in Fundamentals

The summary below is based on Bloomberg’s flow data and DI analysis for the week ending April 11, 2019.


  • Dry gas production decreased 1.07 Bcf/d on the week. The decrease stems mainly from declines in the South Central/Gulf region, which fell 1.06 Bcf/d. The big drop in the region was Louisiana, which fell 0.51 Bcf/d.
  • Canadian net imports decreased 0.34 Bcf/d on the week.


  • Domestic natural gas demand decreased 8.72 Bcf/d week over week. Res/Com demand continued its decline into the summer season, falling 7.66 Bcf/d week over week, while Industrial demand fell 1.23 Bcf/d and Power demand gained 0.17 Bcf/d.
  • LNG exports fell 0.67 Bcf/d week over week due to maintenance at the port of Sabine on trains 1 and 2. Mexican exports increased 0.05 Bcf/d.

Total supply is down 1.41 Bcf/d, while total demand decreased 9.64 Bcf/d week over week. With the decrease in demand greater than the decrease in supply, expect the EIA to report a stronger injection next week. The ICE Financial Weekly Index report is currently expecting an injection of 94 Bcf. Last year, the same week saw a draw of 36 Bcf; the five-year average is an injection of 27 Bcf.


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