Natural Gas Storage Report - May 31

[dan_s]

Working gas in storage was 1,725 Bcf as of Friday, May 25, 2018, according to EIA estimates. This represents a net increase of 96 Bcf from the previous week. Stocks were 788 Bcf less than last year at this time and 500 Bcf below the five-year average of 2,225 Bcf. At 1,725 Bcf, total working gas is within the five-year historical range.

This is bullish:
> We tick off one more week of the refill season and we are still 500 Bcf below the 5-year average.
> HOT SUMMER = more demand from all of the gas fired power plants
> Utilities must be getting "concerned" that they will not have enough gas in storage when the next winter heating season arrives.

If storage is still 300 Bcf below the 5-year average at the end of June (now 99% likely) then utilities bidding against each other in the physical market can get very interesting.

Over the last 52 weeks (one year for those of you that flunked math), the delta to the gas going in and out of storage is -765 Bcf compared to the 5-year average. This is a crystal clear sign (at least to me) that demand for U.S. natural gas is keeping up with the surging supply. That said, this is a short-term situation because a lot of pipeline takeaway capacity is coming on-line later this year.

My SWAG on gas prices: A few more storage reports at or below the 5-year average will push ngas prices firmly over $3.00/MMBtu.