Energy Prospectus

This week's 100bcf natural gas inventory build came in 4% shy of Street expectations of a 104bcf build (TPHe 110bcf) and puts inventories at a 14% deficit to the 5 year average; further eroding the 22% deficit seen one month prior. Compared to year ago levels, inventories have sat at a 9% surplus for the duration of May. Inventory builds continue to track above the 5 year average with this week's coming in 14% (12bcf) higher and bringing total gas in storage to 1.75tcf. Total degree days came in 8% above the 5 year average and the weather adjusted oversupply is sitting at 3bcfd (up from 2bcfd last week). LNG export volumes continue to ramp, reaching an all-time high of 5.98bcfd late last week and, as mentioned in our US natural gas update out this week, we see strong LNG exports as key to temporarily balancing the market in Q3'19. A preliminary look at next week has inventories building by 103bcf, compared to a 5 year average 95bcf build.

Dan: Note that the % deficit to the 5-year average will continue to go down just because the denominator will continue to go up. My take is that weekly builds will move clost to or even below the 5-year average in July-Sept because of increasing LNG exports and more gas fired power plants YOY.