Second Consecutive Bearish Report, Gas Prices Fall Below $3.00

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Natural gas storage inventories increased by 97 Bcf for the week ended Sept. 15, per EIA. The report came in above most market expectations of an injection in the low 90s.

The larger-than-expected build took prices down below the $3.00 mark. The Oct contract (prompt) is trading down $0.12 to $2.97 per MMBtu, at time of writing.

Second Consecutive Bearish Report, End-of-Season Inventories Edge Higher

Working gas storage inventories increased to 3.408 Tcf, level 136 Bcf below last year. However, it remains 67 Bcf above the 5-year average.
See Drillinginfo EIA’s chart below. 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 3.82 Tcf and 3.92 Tcf.

Second Consecutive Bearish Report, Gas Prices Fall Below .00

This Week In Fundamentals
The summary below is based on PointLogic’s flow data and DI analysis for the week ending 9/21.

• Supply: dry gas production is up 0.5 Bcf/d week-on-week as Gulf volumes returned to pre-Harvey volumes. Sept-to-date production average 74 Bcf/d up 1.3 Bcf/d from August and 2.7 Bcf/d from last year (Sept 2016). Canadian imports also increased this week, up 0.6 Bcf/d. Total supply is up 1.1 Bcf/d.

• Demand: total demand is showing significant gains from last week as a heat wave covered most of the U.S. Power demand is up 5.7 Bcf/d. LNG and Mexico exports are also up, 0.1 and 0.3 Bcf/d, respectively. Total demand is up 6.9 Bcf/d.

• Total supply is up 1.1 Bcf/d, total demand is up 6.9 Bcf/d. Market is significantly shorter this week. A storage injection in the 70-80 Bcf is expected.

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