Natural gas storage inventories decreased by 36 Bcf for the week ending Apr. 13, according to the EIA’s weekly report. This withdrawal was stronger than market expectations in the high 20s. Natural gas prices traded up immediately following the EIA release. However, due to selling pressure this morning ahead of the number, the May contract is trading lower than yesterday’s close at $2.72 per MMBtu at the time of writing.
The past five years all saw injections for the same week, with the five-year average at 41 Bcf and last year’s injection at 54 Bcf. Working gas storage inventories dropped to 1.30 Tcf, which is 808 Bcf below last year and 449 Bcf below 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 PointLogic’s flow data and DI analysis for the week ending Apr. 19, 2018.
- Dry gas production is down 0.6 Bcf/d with the West (-0.3 Bcf/d), Northeast (-0.2 Bcf/d), Gulf of Mexico (-0.2 Bcf/d), and Texas (-0.1 Bcf/d) regions decreasing production while the Southeast (+0.2 Bcf/d) increased week-on-week.
- Canadian imports are down 0.4 Bcf/d week-on-week.
- Domestic natural gas demand is up 0.8 Bcf/d with Power (+0.8 Bcf/d) increasing while Res/Com and Industrial remained flat. Power demand has been increasing over the past three weeks and is expected to continue doing so as temperatures rise and cooling demand ramps up.
- Although heating demand typically drops this far into spring, temperatures have been significantly below normal in the Northeast and Midcontinent regions, delaying the seasonal trend. Current weather forecasts indicate that the cold front will move southeast over the next week before dissipating. On the other hand, the West is expected to see above-normal temperatures driving power demand for cooling.
- LNG exports are up 0.2 Bcf/d while Mexico exports are flat week-on-week.
- Total supply is down 1 Bcf/d and total demand is up 1 Bcf/d week-over-week. Another withdrawal is possible next week. Gas storage reports from the past five years have all shown injections for the current report going forward. Last year’s injection was 74 Bcf and the five-year average is 62 Bcf for the same week.
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