SPARK Premier Energy Conference | Register Today | Aug 22 - 24

Smaller-than-Expected Build Drives Gas Prices Higher


Natural gas storage inventories increased by 28 Bcf for the week ended Aug. 4, per EIA. The build was below most market expectations which were in the mid-30s. Natural gas prices gained $0.04 cents yesterday and extended the gains following the EIA report. Prompt month contract (Sept 2017) is currently trading at $2.988, up $0.10 cents at time of writing.

Five-Year Average Gap in Inventories Eroding

Working gas storage inventories increased to 3.038 Tcf, level 275 Bcf above last year and only 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 3.68 Tcf and 3.95 Tcf.

This Week In Fundamentals
The summary below is based on PointLogic’s flow data and DI analysis for the week ending 8/10.

Supply: dry gas production averages 73 Bcf/d this week, up 100 MMcf/d from last week. Total supply is down 300 MMcf/d due to declines in imports from Canada.

Demand: colder-than-normal temperatures continue to keep a lid in demand. Total demand is down 0.6 Bcf/d this week.

Storage: an injection in the 40s Bcf is expected to be released by EIA next week due to persistent weak demand.

The following two tabs change content below.