Natural gas Storage Report - Jan 12

[dan_s]

Working gas in storage was 3,160 Bcf as of Friday, January 6, 2017, according to EIA estimates. This represents a net decline of 151 Bcf from the previous week. Stocks were 363 Bcf less than last year at this time and 4 Bcf below the five-year average of 3,164 Bcf. At 3,160 Bcf, total working gas is within the five-year historical range.

During the last five weeks of 2016 (35 days ending December 30), natural gas in storage declined by 684 Bcf. This compares to the 5-year average of -446 Bcf for the last five weeks of the year.
> We only had two really cold weeks in December, yet we had a much larger decline in storage than the 5-year average.
> U.S. natural gas production declined 3.122 Bcf per day from July, 2015 (the peak) to October, 2016 (last month we have actual data). You can confirm this yourself by going to the EIA website and searching "Natural Gas Production". Link: https://www.eia.gov/dnav/ng/hist/n9050us2m.htm
> Demand for natural gas in the U.S. market, including exports, increased by an estimated 2.5 Bcf per day in 2016 and is forecast to increase by another 3.5 Bcf per day 2017.
> Gas prices remained low in 2016 because demand from the utilities to refill storage was way down, offsetting the increase in demand for power generation, industrial demand and exports. THIS WILL NOT HAPPEN AGAIN THIS YEAR.

IT IS NOT JUST THE WEATHER THAT DETERMINES NATURAL GAS PRICES.

Demand during last year's refill season (April to November / 243 days) was depressed by the El Nino winter that left ~850 Bcf above the 5-year average in storage. THAT WILL NOT HAPPEN THIS YEAR. Refilling storage is a big part of the annual demand for natural gas. Year-over-year the U.S. gas market will have more than 3 Bcf per day more demand during the refill season (April to November) than it did last year.

Keep in mind that we only have imports from Canada to help meet U.S. gas demand and Canadian gas production has also declined.

[dan_s]

Go here and click on Gas Storage: http://www.americanoilman.com/