Natural Gas Storage Report - August 17

[dan_s]

Working gas in storage was 3,082 Bcf as of Friday, August 11, 2017, according to EIA estimates. This represents a net increase of 53 Bcf from the previous week. Stocks were 254 Bcf less than last year at this time and 55 Bcf above the five-year average of 3,027 Bcf. At 3,082 Bcf, total working gas is within the five-year historical range.

5-year average build for this week is 59 Bcf, so we moved 6 Bcf closer to the 5-year average. Mild weather in the eastern half of this year caused the larger build than for the week ending August 4. HOT and HUMID weather for the second half of August across the South should reduce builds the next few weeks. If you live in Houston, you know what I mean.

See chart at: http://ir.eia.gov/ngs/ngs.html

My prediction remains that gas in storage will drop below the 5-year average in September.

[dan_s]

Over the last 22 weeks (starting mid-March) the delta to the 5-year average storage level has declined by 356 BCF. There are 13 weeks remaining in the refill season before the next winter heating season begins (mid-November).

[setliff]

dan, nature is totally against your natty predictions!

http://www.cpc.ncep.noaa.gov/products/p ... /index.php

[dan_s]

Weather is just part of it. We only have actual production data through May. For January - May, U.S. dry gas production has been down YOY. Exports continue to grow.

Despite mild weather most of the summer, the delta to the 5-year average has declined 356 Bcf the last 22 weeks.

The Deep South is were most of the natural gas "peaking plants" are. If Texas and Florida are hot they will burn a lot of gas.

You can see the history on gas storage at http://www.americanoilman.com/ Click on "Gas Storage".

We are going to see gas storage below the 5-year average in September.

[dan_s]

On March 3, 2016, natural gas prices fell to the lowest closing price in 17 years, less than $1.70/MMBtu. Natural gas inventories were 41.5% above the five-year average.

Based on today's inventory report, natural gas inventories are 55 Bcf above the five-year average or just 1.8% above the average. Over the last six weeks (ending August 11) the delta to the five-year average has declined 128 Bcf (just over 3 Bcf per day).

Here is the deal: Refilling natural gas storage is part of demand. Utilities need a lot of gas in inventory to meet the spike in demand that happens each winter.

Current U.S. production + imports from Canada has been at least 2 Bcf below demand the entire refill season. Unless there is a significant change in this pattern, we are less than 30 days away from seeing storage fall below the five-year average.

After Labor Day, my guess is that Mother Nature will send us some signals that cooler weather is coming and we will have another winter. Wall Street will focus on this situation after Labor day.

BTW it has been hot as hell in Houston all week and the forecast is for high 90s through the end of August. We are definitely doing are part to burn up natural gas.