Working gas in storage was 3,401 Bcf as of Friday, August 26, 2016, according to EIA estimates. This represents a net increase of 51 Bcf from the previous week. Stocks were 238 Bcf higher than last year at this time and 334 Bcf above the five-year average of 3,067 Bcf. At 3,401 Bcf, total working gas is above the five-year historical range.
The 5-year average increase in storage for this week is 72 Bcf.
This is the 17th week in a row that the weekly increase in storage has been significantly below the 5-year average. Over the last 17 weeks the gap between the 5-year average has declined by 506 Bcf (~29.76 Bcf per week).
There are 11 weeks remaining in the refill season before draws for the winter heating season begin. With the path we are on, storage should be very close to the 5-year average when the heating season begins. Keep in mind that there has been a BIG increase in natural gas demand over the last five years.
Go to http://www.americanoilman.com/ and click on Gas Storage.
Natural Gas Storage Report - Sept 1
Natural Gas Storage Report - Sept 1
Last edited by dan_s on Thu Sep 01, 2016 5:27 pm, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Sept 1
Below is a note sent out by Jeremy McCrea at Raymond James on August 31 (before the Sept 1 storage report came out). I have been posting here for over six weeks that the trend in the weekly natural gas storage reports points to a much tighter gas market in the U.S. within a few months and much higher gas prices this coming winter. As you can see in the note below, Raymond James is coming to the same conclusion. It is very important for you to remember that the natural gas market has no relationship to the oil market. The U.S. has very little import capacity to offset a domestic supply shortage. The U.S. natural gas market is clearly heading in the direction of a supply shortage and (so far) I do not see any change in drilling programs to indicate additional supplies will be added in time to make a difference. - Dan
Raymond James' Canadian Research "Energy Note" dated August 31, 2016:
The consensus expectation for tomorrow’s gas injection is 41 bcf, which is once again
below the five year average of injection for this time. Since hitting a working gas
storage surplus of 836 bcf (versus the prior 5-year average) on April 29, the supply has
been reduced with last week’s excess storage level only 350 bcf above the 5-year
average.
We saw a similar storage surplus of ~900 bcf in the spring of 2012, which within 12
months had swung to a deficit of -120 bcf and within 24 months moved to a deficit of
over 1,000 bcf – a swing of nearly 2 tcf. Although there are many moving parts to the
storage picture and related pricing the apparent correlation is interesting.
One final point is the continual downshift in pricing each year since 2010, which we
believe is reflective of improving capital efficiency. 2016 marks the first time this has
reversed which is likely a result of lower NGL prices that would require higher gas prices
to justify well economics.
Conclusion: Overall, if oil (and NGL) prices remain low and gas storage levels continue to fall, NYMEX gas prices should continue to move upward.
Raymond James' Canadian Research "Energy Note" dated August 31, 2016:
The consensus expectation for tomorrow’s gas injection is 41 bcf, which is once again
below the five year average of injection for this time. Since hitting a working gas
storage surplus of 836 bcf (versus the prior 5-year average) on April 29, the supply has
been reduced with last week’s excess storage level only 350 bcf above the 5-year
average.
We saw a similar storage surplus of ~900 bcf in the spring of 2012, which within 12
months had swung to a deficit of -120 bcf and within 24 months moved to a deficit of
over 1,000 bcf – a swing of nearly 2 tcf. Although there are many moving parts to the
storage picture and related pricing the apparent correlation is interesting.
One final point is the continual downshift in pricing each year since 2010, which we
believe is reflective of improving capital efficiency. 2016 marks the first time this has
reversed which is likely a result of lower NGL prices that would require higher gas prices
to justify well economics.
Conclusion: Overall, if oil (and NGL) prices remain low and gas storage levels continue to fall, NYMEX gas prices should continue to move upward.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
bearcatbob
Re: Natural Gas Storage Report - Sept 1
Was the RJ WTI $60 forecast for the 3rd or 4th qtr.?