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Natural Gas Injection Season Begins


Natural gas storage inventories increased 23 Bcf for the week ending March 29, according to the EIA’s weekly report. This injection is slightly above the market expectation, which was an inventory increase of 19 Bcf.

Working gas storage inventories now sit at 1.130 Tcf, which is 228 Bcf below inventories at the same time last year and 505 Bcf below the five-year average.

At the time of this writing, the May 2019 contract was trading at $2.670/MMBtu, $0.007 below yesterday’s close of $2.677/MMBtu.

The last expected draw of the season was reported last week, leaving the start of injection season inventories at 1.107 Tcf, roughly 175 Bcf below the start of injection season last year.

The bulk of the deficit to last year comes from the South Central region, which ended this draw season with 137 Bcf less inventory than the end of the winter 17/18 draw season. The deficit increases with the Pacific and Mountain regions, which show a 73 Bcf and 22 Bcf inventory deficit to last year, respectively. The East and the Midwest regions continued to report withdrawals this week, but were offset by the injections in other regions.

Increased production year over year is expected to be a key factor in offsetting the inventory deficit. However, increased structural demand (LNG and Power capacity) and weather might constrain injection volumes, putting upward pressure on prices for the remaining of 2019.

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 4, 2019.


  • Dry gas production decreased 0.14 Bcf/d on the week. An increase was observed in the East region (+0.35 Bcf/d) but was offset by the Mountain (-0.22 Bcf/d) and the South Central/Gulf (-0.27 Bcf/d) regions.
  • Canadian net imports increased 0.06 Bcf/d on the week.


  • Domestic natural gas demand decreased 0.81 Bcf/d week over week. Res/Com demand continues its decline into the summer season, falling 1.59 Bcf/d week over week, while Power and Industrial demand increased 0.66 Bcf/d and 0.12 Bcf/d, respectively.
  • LNG exports were flat week over week, while Mexican exports increased 0.07 Bcf/d.

Total supply is down 0.09 Bcf/d, while total demand decreased 0.76 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 29 Bcf. Last year, the same week saw a draw of 19 Bcf; the five-year average is an injection of 11 Bcf.

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