Natural Gas Storage Report - Nov 21

[dan_s]

I was traveling all last week, so I didn't get to comment on this bullish storage report.

Working gas in storage was 3,638 Bcf as of Friday, November 15, 2019, according to EIA estimates.
This represents a net decrease of 94 Bcf from the previous week. Stocks were 506 Bcf higher than last year at this time and 60 Bcf below the five-year average of 3,698 Bcf.
At 3,638 Bcf, total working gas is within the five-year historical range.

1. The "official" start of the winter heating season is November 15.
2. Starting the winter this early with less than 3,800 Bcf in storage is bullish.
3. We do have more natural gas production than ever before, BUT we also have more demand for U.S. gas. More LNG exports and via pipe to Mexico are big demand additions this quarter.

Weather will be the MAJOR determining factor for gas prices through March.
Keep in eye on weather in Chicago: https://www.wunderground.com/forecast/us/il/chicago Chicago is the "Bulls Eye" for space heating demand for gas.

My WAG is that the next two weeks' storage reports should be close to the average 5-year draws of 110 bcf (combined), but the big dip in the northern jet stream that is bringing lots of cold and snow to Minnesota this week will move over the Great Lakes Region this weekend. If so, we should see triple digit draws from storage for the first week of December, which compares to the 5-year average of 70 bcf.

NYMEX futures for gas are over what I'm using in my Q4 and Q1 forecasts, but after Q1 the outlook for gas prices is still bearish. It will take a VERY COLD winter to change this.