EIA - Natural Gas Storage Report - April 29

[dan_s]

Working gas in storage was 1,898 Bcf as of Friday, April 23, 2021, according to EIA estimates. This represents a net increase of 15 Bcf from the previous week. Stocks were 302 Bcf less than last year at this time and 40 Bcf below the five-year average of 1,938 Bcf.
At 1,898 Bcf, total working gas is within the five-year historical range.

AEGIS Notes
"EIA reported a build of 15 Bcf for the week ending 4/23/2021. This was larger than the median estimate of 9 Bcf. Today’s stat fell within the expected range, which was 19 Bcf on the more bearish end, and 6 Bcf on the more bullish end. Prices were down in the five minutes following the announcement, to $2.911, from $2.946 just before 9:30am."

MY TAKE
> Natural gas had a nice run and profit taking is expected with just a slightly larger build than expected. Strip gas prices are still higher than what I'm using in my forecast models.
> Some traders see rising oil prices as a negative for natural gas because an increase in rigs drilling for oil could bring on more "associated gas". Unless oil prices go a lot high, I don't expect to see a significant increase in the number of rigs drilling for oil. Team Biden's talk of taking away the IDC deduction will make it harder for private companies to raise money.
> Also, I've seen some companies reporting increases in the gas-to-oil ratio, especially in the Bakken.
> Over the last 13 weeks (Qtr of the year), net storage draws have been 299 Bcf higher than the 5-year average; most of it in the last two weeks of February. On January 29 storage was 207 Bcf above the 5-year average. On April 23 storage is 40 Bcf below the 5-year average. This means, demand for gas exceeds supply.
> Looking forward, the 5-year average weekly builds get larger thru early June, so it will be difficult for storage to refill before next winter.
> Unless there is a decline in LNG exports (not anticipated), gas prices should move higher this summer when electricity demand ramps up.