EIA - Natural Gas Storage Report - May 26
Posted: Thu May 26, 2022 9:45 am
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.
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.