Natural Gas Storage Report - April 19

[dan_s]

I told you so! Actually, gas in storage is going to end up even further below last year on April 30 than I was expecting.

Per EIA: Working gas in storage was 1,299 Bcf as of Friday, April 13, 2018, according to EIA estimates. This represents a net decrease of 36 Bcf from the previous week.
Stocks were 808 Bcf less than last year at this time and 449 Bcf below the five-year average of 1,748 Bcf. At 1,299 Bcf, total working gas is within the five-year historical range.

This is really not an issue caused by the colder than normal and longer than normal winter weather. That's definitely helped of course, but over the last 52-weeks the delta to the 5-year average increase/decrease in storage has been -747 BCF. That sure doesn't look like a country "awash in gas supply" that EIA keeps telling us we have.

There is NO DOUBT that U.S. natural gas production has increased, but DEMAND HAS INCREASED MORE over the last 52-weeks. Over the last six weeks, the delta to the 5-year average storage draws has been -222 BCF.

I now think we get to April 30 with storage 850 BCF below last year.

This is not impacting the price of gas (yet) because the belief is that we have a HUGE surge in gas production "just weeks away". EIA has been predicting it since the beginning of the winter heating season in November. However, the "surge" never seems to have an impact on the weekly storage reports, so all of the supply growth must be burned up or shipped out.

When winter finally ends, if we get a HOT start to summer it will get very interesting. Gas storage MUST BE REFILLED BEFORE THE NEXT WINTER HEATING SEASON ARRIVES. Refill season will be shorter this year and we are going to start the job in a deep hole.