Energy Prospectus

Working gas in storage was 2,689 Bcf as of Friday, January 29, 2021, according to EIA estimates. This represents a net decrease of 192 Bcf from the previous week.
Stocks were 41 Bcf higher than last year at this time and 198 Bcf above the five-year average of 2,491 Bcf.
At 2,689 Bcf, total working gas is within the five-year historical range.

This knocks 50 Bcf off the delta to the 5-year average.

My Wild Ass Guess ("WAG") is that ngas storage will go below the 5-year average by the end of March. If LNG exports stay over 10 Bcf per day through April (now likely), we will see storage levels go way below the 5-year average in Q2. What this means is that unless there is a significant increase in rigs drilling for ngas, we are on a path to start the next winter with not enough gas in storage to make it through a cold winter.

Demand for U.S. natural gas has been and will continue rising much faster than global demand for oil; 4X to 5X faster.

New York — Sempra LNG's LA Storage has asked the Federal Energy Regulatory Commission for permission to build a new salt dome facility capable of providing about 20 Bcf of working natural gas storage capacity in near Hackberry, Louisiana, to meet needs of Gulf Coast LNG facilities and other regional demand.

US LNG feedgas demand is forecast to rise 4.25 Bcf/d from 2021 to 2026, with all the projects being built along the Gulf Coast, according to S&P Global Platts Analytics. The high-deliverability Hackberry facility would help send reliable supply to facilities in the area, easing pressure to build more large pipelines, especially in a more restrictive regulatory environment for pipeline projects.

Some 81% of storage capacity in the Lower-48 states is in depleted fields, which have to be completely emptied before they can be refilled, according to Platts Analytics. As a result, they are generally useful when demand follows a binary seasonal pattern. Salt dome facilities have on average quadruple the maximum daily withdrawal rate and can be cycled more than once per season, providing significantly more optionality.

NOTE: Commodity traders watch the comparison of gas in storage to the 5-year average carefully, but since demand for gas is much higher than it was five years ago that is an outdated comparison. Since demand for U.S. gas is 15% to 20% higher than five years ago, we need a lot more gas in storage to insure a steady supply.

This is a really big WAG: Over the next five weeks ending March 5, I am now predicting that EIA will report draws from storage totaling 790 Bcf.
If so, on March 5th the gas in storage will be 36 Bcf below the 5-year average.