EIA - Natural Gas Storage Report - May 26

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

EIA - Natural Gas Storage Report - May 26

Post by dan_s »

Working gas in storage was 1,812 Bcf as of Friday, May 20, 2022, according to EIA estimates.
This represents a net increase of 80 Bcf from the previous week.
Stocks were 387 Bcf less than last year at this time and 327 Bcf below the five-year average of 2,139 Bcf.
At 1,812 Bcf, total working gas is within the five-year historical range.

This is a very bullish report for natural gas prices.
> Build is 21 Bcf lower than the 5-year average for the same week.
> Build is below the range that the "experts" predicted.
> More important, over the last 13 weeks (a quarter of a year) the net increase in ngas storage has been 163 Bcf below the 5-year average.
> LNG exports are now back to capacity, over 13 Bcf per day. If LNG exports stay near capacity, we will need U.S. ngas production to ramp up to over 97 Bcfpd average for the remainder of the year to refill storage. So far, there is no indication production will increase that much. Therefore, the Bidding War will intensify.
> Higher temperatures will be spreading across the nation in June and the deficit to the 5-year average will increase
> Large builds in May were utilities only chance of getting storage back to the 5-year average before next winter.
> If ngas goes over $10/MMBtu we may see some gas-to-coal fuel switching, but the maximum is a 1 Bcfpd decline in ngas used for power generation. Lack of coal inventories makes maximum gtc fuel switching very unlikely.

Early in June, I will be adjusting all of my forecast/valuation models for increased natural gas prices. Unless there is a big change in the NYMEX strip, I will be going with the latest Raymond James' oil & gas price forecasts.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: EIA - Natural Gas Storage Report - May 26

Post by dan_s »

Trading Economics
"US natural gas futures gained more momentum, rallying to $9.2 per million British thermal units level and approaching a near 14-year high of $9.4 hit in the previous session, following a bullish weekly inventory report. EIA data showed US natural gas stocks rose by 80 billion cubic feet (bcf) last week, missing median estimates of an 89 bcf build and also less than the 5-year average injection of 97 bcf, which puts current inventory levels 15.3% below the 5-year average. The contract more than doubled in value since the beginning of 2022, supported by higher domestic and international demand amid sluggish output. Russia's war on Ukraine has caused a global energy crunch, with demand for US LNG set to remain elevated partly due to Europe's calls for US exports to help cut reliance on Russian gas. On top of that, prospects of increasing demand for cooling as the weather turns hotter in the United States could drive prices higher."
Dan Steffens
Energy Prospectus Group
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