Working gas in storage was 2,536 Bcf as of Friday, February 26, 2016, according to EIA estimates. This represents a net decline of 48 Bcf from the previous week. Stocks were 794 Bcf higher than last year at this time and 666 Bcf above the five-year average of 1,870 Bcf. At 2,536 Bcf, total working gas is above the five-year historical range.
It now looks like we will end the winter heating season with ~2.300 Bcf in storage, compares to the 5-year average of ~1,600 Bcf.
The near-term outlook for natural gas prices is bearish, but the U.S. gas market should be 4-6 Bcf per day tighter heading into next winter. The U.S. market is ~80 Bcf per day, so a tightening of this size is significant and should result in stronger prices by year-end. For more on this, see my presentation slides posted to the EPG website on 3-2-2016.
Declining gas production from the oil shale plays will also tighten the NGL market. NGL prices were terrible in Q3, but they did move higher in Q4 and should be even better in Q1 as the winter storms increased propane demand.
Natural Gas Storage Report - Mar 3
Natural Gas Storage Report - Mar 3
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group