EIA: Natural Gas Storage Report - Feb 28

[dan_s]

Working gas in storage was 1,539 Bcf as of Friday, February 22, 2019, according to EIA estimates. This represents a net decrease of 166 Bcf from the previous week.
Stocks were 154 Bcf less than last year at this time and 424 Bcf below the five-year average of 1,963 Bcf. At 1,539 Bcf, total working gas is within the five-year historical range.

There are just five weeks remaining in the winter heating season (assuming the cold weather ends on March 29th).
The 5-year average draws for the next five weeks total 371 Bcf, which would take gas in storage down to 1,168 Bcf (compares to the 5-year average of 1,637 Bcf on March 31st).

The last time gas in storage was this far below the 5-year average at the end of March was 2014. Natural gas spiked to over $5.00 in Q1 2014 and average about $4.25 for the year.
See historical price chart here: https://tradingeconomics.com/commodity/natural-gas

This year we have the FEAR of a lot of Permian Basin "associated gas" coming on-line in 2H2019 that is keeping a lid on the gas price. However, we also rapidly increasing demand for cheap & clean U.S. natural gas. Enbridge has opened a big pipeline from South Texas to Mexico and LNG export facilities are ramping up. It will be interesting to watch how the U.S. natural gas market plays out. It looks like the next two storage reports will be draws that exceed the 5-year average. MY TAKE: The U.S. gas market will remain much tighter than most people believe.

Near-term: The upside for gas is if winter weather drags on into April like it did last year.