EIA - Natural Gas Storage Report - July 15

[dan_s]

Working gas in storage was 2,629 Bcf as of Friday, July 9, 2021, according to EIA estimates. This represents a net increase of 55 Bcf from the previous week. Stocks were 543 Bcf less than last year at this time and 189 Bcf below the five-year average of 2,818 Bcf.
At 2,629 Bcf, total working gas is within the five-year historical range.

Over the last 13 weeks (a quarter of a year) the amount of gas in U.S. storage has gone from 5 Bcf above the 5-year average to 189 Bcf below the 5-year average. What's more impressive is that this happened during a seasonal low demand period.

Each week that passes lowers the chance that gas storage will get back to the 5-year average of 3,735 Bcf before the next winter heating season begins.

The increase of 55 Bcf was slightly higher than expected. From July to the end of August the 5-year average builds range from 27 Bcf to 65 Bcf.

At the time of this post the NYMEX front month contract (AUG21) for Henry Hub gas was trading $3.648/MMBtu and the futures contracts for DEC21 to FEB22 were all trading for over $3.80. These prices are higher than what I am currently using in my forecast/valuation models.

[dan_s]

Barron's: Natural gas is rallying. Why prices are likely to remain high
Natural gas has rallied this year, with summer heat and tight U.S. supplies of the fuel in storage lifting prices to their highest levels in 2½ years—and setting the market up for a potential shortage for the winter. Natural gas has found strength not only from below-normal levels of storage, but also pipeline issues that limited production recently, says Gary Cunningham, director of market research at Tradition Energy.