Natural Gas Storage Report - Jan 17

[dan_s]

Working gas in storage was 2,533 Bcf as of Friday, January 11, 2019, according to EIA estimates. This represents a net decrease of 81 Bcf from the previous week.
Stocks were 77 Bcf less than last year at this time and 327 Bcf below the five-year average of 2,860 Bcf. At 2,533 Bcf, total working gas is (barely) within the five-year historical range.

Next week's storage report will be the last draw below the 5-year average until at least the end of February. Winter Storm Harper is going to bring blizzard conditions from Iowa to New England this weekend. Behind Harper will be MUCH COLDER air than we've seen so far this winter and it will stay cold in the eastern 2/3rds of the U.S. well into February. By February 1st gas in storage will be down to approximately 1,900 Bcf and on its way to under 1,000 Bcf by March 31st. This compares to the 5-year average storage level of 1,700 Bcf on March 31st. BTW because of the cold air following Harper, the snow will not melt. A layer of snow on the ground reflects daytime heat and causes much colder temps at night.

See: https://www.wunderground.com/ndfdimage/ ... mint&msg=4

Why is this important??? Refilling storage is a HUGE part of annual natural gas demand in the U.S. Refilling storage is not an option. This nation is heavily dependent on storage gas to meet each winter's space heating demand. Plus, more areas now rely heavily on natural gas for electricity generation; areas that used to have coal fired power plants now have gas fired power plants. In the past, gas demand for power generation would decline in the winter. Now not as much so. U.S. storage must be near 4,000 Bcf by the end of October to safely make it through a cold winter. Refill season lasts about 200 days, so an additional 700 Bcf needed to refill storage adds 3.5 Bcf per day of demand during the refill season (Mid April to early November). That's a big increase in demand that must be met.

[dan_s]

Go here http://americanoilman.homestead.com/GasStorage.html and note that last year draws from storage continued through the first three weeks of April. That shortened the refill season, which had a lot to do with storage being way below average heading into this winter. Should that repeat this year, it would be extremely bullish for natural gas prices this summer.