The EIA announced a 74 Bcf injection for the week ended April 21. The full range of forecasts ahead of the release was between a 62 Bcf and a 91 Bcf injection, with an average of a 72 Bcf build. The report is bearish again this week as the injection came in higher than most expectations. Prices are also down 1-2 cents following the release. The prompt contract (June2017) is trading at $3.25 per MMBtu, at time of writing.
Storage Inventories continue above the 5-year average
Working gas storage inventories increased to 2.189 Tcf. Inventories remain below last year and 5-year high levels by 358 Bcf. However, inventories are above the 5-year average by 299 Bcf.
See Drillinginfo EIA’s chart attached. This graphic shows projections for end-of-season inventories as of Nov 1. Two scenarios are included for summer injections (April-Oct) that result in inventories between 3.6 Tcf and 4.3 Tcf.
Natural Gas Fundamentals
Prices are expected to continue trading rangebound until more summer-like temperatures materialize pushing demand higher. Drillinginfo continues to call for prices to rise in order to facilitate production to climb back above 72 Bcf/d. This level of production is necessary for storage to start next winter at or above 3.6 Tcf.
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