Enverus Blog

Insights across the energy value chain

Natural gas storage inventories decreased by 19 Bcf for the week ending Apr. 6, according to the EIA’s weekly report. The withdrawal was slightly above market expectations. Natural gas prices are trading roughly in line with yesterday’s close with the May contract trading at $2.67 per MMBtu at the time of writing.

Last year saw an injection of 10 Bcf for the same week and the 5-year average is an injection of 12 Bcf. Working gas storage inventories dropped to 1.34 Tcf, which is 725 Bcf below last year and 375 Bcf below the 5-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.

Natural Gas Prices Flat as Storage Decreases by 19 Bcf

This Week in Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending Apr. 12, 2018.

  • Supply:
    • Dry gas production is up 0.1 Bcf/d with Texas (+0.1 Bcf/d), Northeast (+0.1 Bcf/d), Rockies (+0.1 Bcf/d), and Midcon (+0.1 Bcf/d) all increasing production, while the Southeast (-0.2 Bcf/d) decreased week-on-week.
    • Dry gas production continues its upward trajectory. Daily production first breached the 80 Bcf/d level on Mar. 29. There have been eight days of 80+ Bcf/d dry production so far, with four of them occurring during the past week.
    • Canadian imports are down 0.2 Bcf/d week-on-week.
  • Demand:
    • Domestic natural gas demand is up 0.5 Bcf/d with Power (+1 Bcf/d) increasing, Res/Com decreasing (-0.5 Bcf/d), and industrial flat.
    • Current weather forecasts indicate that most of the country outside of Texas and the Southeast is expected to see below average temperatures during the next week or two, likely setting the stage for more withdrawals.
    • Mexico exports are up 0.3 Bcf/d, and LNG exports are up 0.1 Bcf/d.
  • Total supply is down 0.3 Bcf/d and total demand is up 1.1 Bcf/d week-over-week. A larger withdrawal is expected next week. The past 5 years all saw an injection for the same week with the 5-year average at 41 Bcf and last year’s injection at 54 Bcf.

 

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