Natural Gas Storge Report - March 29

[dan_s]

Working gas in storage was 1,383 Bcf as of Friday, March 23, 2018, according to EIA estimates. This represents a net decrease of 63 Bcf from the previous week. Stocks were 672 Bcf less than last year at this time and 346 Bcf below the five-year average of 1,729 Bcf. At 1,383 Bcf, total working gas is within the five-year historical range. < In the lower half of the 5-yr range and demand is MUCH HIGHER than it was five years ago.

Draws from gas storage usually end at the end of March, but this year winter is hanging around in the Great Lakes Region for at least the first ten days of April. Confirm this by watching the daily update here: https://www.weatherbell.com/premium/

What does this mean?
1. We will have at least two more and probably three more weekly draws from storage.
2. Storage level will go more than 700 Bcf below last year at this time. My SWAG is -730 Bcf by mid-April
3. MOST IMPORTANT: Winter going well into April will shorten the refill season and increase natural gas demand this summer. To refill storage back to where it was on 11-1-2017 will take 3.4 Bcf per day of additional gas from April 1 to October 31. This is a significant increase in demand that no one seems to notice.

EIA keeps pumping the story that a massive amount of natural gas supply is coming on-line, but it is not showing up in the weekly storage reports. One problem may be that takeaway capacity in the Delaware Basin (far west area of the Permian Basin) is maxed out already.

BTW the outlook for the midstream sector is fantastic and it is not showing up in the share prices.