Natural Gas Storage Report - Sept. 5

[dan_s]

Working gas in storage was 3,188 Bcf as of Friday, August 30, 2013, according to EIA estimates. This represents a net increase of 58 Bcf from the previous week. Stocks were 210 Bcf less than last year at this time and 43 Bcf above the 5-year average of 3,145 Bcf.

My take is that Ngas will flop around in the $3.50/mmbtu range as long as weekly injections are in-line with the 5-year average. An early cold wave in October would certainly help. - Dan

From CME Group: "Nat Gas futures need fundamental support to move prices above current levels and remain there for a sustained period of time. The fundamentals have been disappointing this week with an over performance of the weekly inventory injection level as well as a changing weather forecast from both a temperature and tropics perspective.
The latest NOAA six to ten day and eight to fourteen day forecasts are still forecasting above normal temperatures over about two thirds of the country with the rest of the country expecting late summer/early fall weather through the middle of September. In fact in the New York area is feels more like fall today rather than late summer. As we saw in this week's inventory report the above normal temperatures did not result in a significant jump up in weather related Nat Gas consumption.

There are now three events in the tropics with all low probability events as Gabrielle has quickly dissipated. None of the events are currently strong enough to raise concern for US oil and Nat Gas operations in the Gulf of Mexico. We will keep the tropics high on the radar list of events that could potentially have an impact on oil and Nat Gas production in the US Gulf and thus prices.

In this week's EIA Nat Gas report falling power sector demand for natural gas resulted in a total gas consumption decrease of 0.8% compared with the previous report week. Consumption of natural gas for power generation (power burn) decreased 1.3% from the previous week, according to Bentek Energy data. The Midwest region registered a week-over-week decline of 34.3%. This more than offset increases in power burn in the Rockies, Southwest and Southeast. Residential and commercial consumption increased 1.3%, and industrial consumption increased 0.2%. U.S. pipeline exports to Mexico fell 12.3% but are still 4.1% higher than this week last year.

Gas supply increased slightly during the report week. Total supply increased by 0.6% over the previous week. Dry gas production and imports from Canada rose week-on-week, by 0.4% and 1.1%, respectively. Imports from Canada increased in the Midwest and Northeast, but decreased in the West. Imports of LNG also increased over the report week, but continue to be a small contributor to total U.S. natural gas supply."