Natural gas storage inventories increased 73 Bcf for the week ending April 10, according to the EIA’s weekly report. This was slightly larger than the expected injection of 71 Bcf.

Working gas storage inventories now sit at 2.097 Tcf, which is 876 Bcf above inventories from the same time last year and 370 Bcf above the five-year average.

Prior to the storage report’s release, the May 2020 contract was trading at $1.570/MMBtu, roughly $0.028 below yesterday’s close. After the release of the report and at the time of writing, the May 2020 contract was trading slightly lower at $1.563/MMBtu.

It’s no secret that over the past month the market has seen some trying times, and those trying times are likely to continue over the coming months. Due to revised spending plans from companies, rigs have been falling off the map, dropping from 817 rigs on March 14 to 556 rigs on April 14. Nearly every basin in the country has seen rigs lay down; however, in spite of the market volatility, the Appalachian basin has seen an increase of four rigs over the past month.

The Appalachian rig increases in the past month is counterintuitive to revised CAPEX cuts being announced across the industry. The basin has seen some declines in production based on pipeline nominations, however these declines have been consistent since the production peak in late 2019. We continue to monitor pipeline nominations closely for evidence of shut-ins or additional declines in reaction to the COVID-19 pandemic.

See the chart below for projections of the end-of-season storage inventories as of November 1, the end of the injection season.



Total supply increased 0.38 Bcf/d, while total demand increased 4.91 Bcf/d week over week. With the increase in demand outpacing the increase in supply, expect the EIA to report a weaker injection next week. The ICE Financial Weekly Index report is currently expecting an injection of 45 Bcf. Last year, the same week saw an injection of 92 Bcf; the five-year average is an injection of 61 Bcf.

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