Natural Gas Storage Report - August 23

[dan_s]

Working gas in storage was 2,435 Bcf as of Friday, August 17, 2018, according to EIA estimates. This represents a net increase of 48 Bcf from the previous week.
Stocks were 684 Bcf less than last year at this time and 599 Bcf below the five-year average of 3,034 Bcf. At 2,435 Bcf, total working gas is below the five-year historical range.

This is the 7th straight week that storage builds have been below the five year average.

There are just 12 weeks remaining before the next winter heating season arrives. There is now ZERO CHANCE of storage reaching the five year average this year. My guess is that storage will be AT LEAST 400 Bcf below the five year average on Thanksgiving.

Gas supply/demand seldom gets much attention until after Labor Day because we always have plenty of gas supply at this time of year. It is refill season.

Today, the September NYMEX futures contract is the "front month", so the price of the September contract is the price you see today for gas. The October NYMEX contract will be the "front month" next week. I am expecting it to close over $3.00/MMBtu by the end of September.
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Per EIA:
"EIA will begin publishing estimates based on a new sample selected for the Weekly Natural Gas Storage Report (WNGSR) on September 13, 2018, with the report for the week ending September 7, 2018. On Monday, September 10, 2018, EIA will revise estimates for the eight weeks covering July 13, 2018, through August 31, 2018, to gradually phase in the estimates from the new sample. Although the established sampling and estimation methodologies for the WNGSR have not changed, estimates produced from the new sample will reflect the most recent version of the EIA's Form EIA-912, which requires storage operators in the South Central region to separately report the volume of working natural gas held in salt facilities and nonsalt facilities. For additional information, please see the notice of changes to the WNGSR: http://ir.eia.gov/ngs/notice.html"

[dan_s]

The five year average storage build for the next 12 weeks = 798 Bcf.

If the next twelve weeks add 798 Bcf to storage we will start the winter with 3,233 Bcf of gas in storage. Last winter 2,509 Bcf was withdrawn from storage to meet space heating demand.

The last time U.S. natural gas in storage went under 1,000 Bcf was March & April of 2014. Natural gas spiked to $5.43/MMBtu that winter and the price of gas stayed over $4.00/MMBtu the entire year.

Check for yourself here: https://www.macrotrends.net/2478/natura ... ical-chart

[dan_s]

I just got a report from BMO Capital Markets. Their projection is that the winter heating season begins with ~3,250 Bcf in U.S. storage.
That would be ~600 Bcf below the five year average.

[dan_s]

Read: https://www.dailysignal.com/2018/08/22/ ... oon-going/

The natural gas market (demand) is growing much faster than the global oil market, but oil gets all of the headlines.

[dan_s]

Natural gas prices in Europe going way up: https://www.bloomberg.com/news/articles ... wer-prices