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Natural gas storage inventories decreased by 18 Bcf for the week ending April 20, according to the EIA’s weekly report. This withdrawal was slightly stronger than market expectations of the low teens. Natural gas prices are trading slightly higher than yesterday’s close, with the May contract trading at $2.80 at time of writing.

The past 5 years all saw an injection for the past 2 weeks, with the 5-year average for the current week at 62 Bcf and last year’s injection at 74 Bcf. Working gas storage inventories dropped to 1.28 Tcf, which is 897 Bcf below last year and 527 Bcf below the 5-year average. While it’s typical to see around 200 Bcf of injections during the month of April, this year may see close to zero, as the withdrawals up to this point are likely to balance out the coming injections at the end of the month and create a shorter injection season.

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

Natural Gas Extends Withdrawal Season Again with an 18 Bcf Storage Draw

This Week in Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending Apr. 26, 2018.

  • Supply:
    • Dry gas production is up 0.5 Bcf/d, with the Northeast (+0.2 Bcf/d), Gulf of Mexico (+0.1 Bcf/d), Southeast (+0.1 Bcf/d), Rockies (+0.1 Bcf/d), and Texas (+0.1 Bcf/d) all increasing week-over-week. The weekly average, which stands at 80.1 Bcf/d, has again set a record, surpassing the level set 2 weeks ago.
    • Canadian imports are up 0.3 Bcf/d week-on-week.
  • Demand:
    • Domestic natural gas demand dropped 9 Bcf/d, as spring weather continues to erode heating demand. Res/Com (-7.6 Bcf/d), Power (-0.7 Bcf/d), and Industrial (-0.7 Bcf/d) all declined week-over-week.
    • With spring progressing and weather forecasts indicating normal to above-normal temperatures in most of the country, Res/Com is expected to continue its decline.
    • LNG exports are down 0.4 Bcf/d.
    • Mexican exports are flat week-on-week.
  • Total supply is up 0.7 Bcf/d and total demand is down 10.4 Bcf/d week-over-week, setting the stage for the first injection of the season. Both last year’s injection and the 5-year average are 67 Bcf for the same week.

 

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