EIA's Natural Gas Storage Report - Dec 13

[dan_s]

Working gas in storage was 2,914 Bcf as of Friday, December 7, 2018, according to EIA estimates. This represents a net decrease of 77 Bcf from the previous week. Stocks were 722 Bcf less than last year at this time and 723 Bcf below the five-year average of 3,637 Bcf. At 2,914 Bcf, total working gas is below the five-year historical range.

MY TAKE: If we have a normal winter, it is now likely that we will see natural gas shortages in major cities around the Great Lakes Region as soon as February. Double digit gas prices in the spot market are likely. A colder than normal January in the eastern half of the U.S. will cause serious problems for utility companies.

The 5-year average draws from storage for the next 24 days (Dec 8 to Dec 31) are 441 Bcf. That would push storage to 2,473 Bcf by December 31, 2019, but mild weather for the next ten days should help keep storage above 2,500 Bcf heading into 2019.

In January, 2018 over 1,000 Bcf of gas was drawn from storage. If that is repeated next month, we are going to see MUCH HIGHER natural gas prices.

It is very important that you understand that storage "Base Load" is around 1,000 Bcf. So.... we really only have 1,914 Bcf in storage to get us through the winter. That is not enough.