EIA - Natural Gas Storage Report - Mar 3

[dan_s]

Working gas in storage was 1,643 Bcf as of Friday, February 25, 2022, according to EIA estimates.
This represents a net decrease of 139 Bcf from the previous week.
Stocks were 216 Bcf less than last year at this time and 255 Bcf below the five-year average of 1,898 Bcf.
At 1,643 Bcf, total working gas is within the five-year historical range.

Over the last five weeks of winter (Feb 26 to Apr 1) we should see total draws of 200 to 250 Bcf. The 5-year average draws for this period are 202 Bcf, so my Wild Ass Guess ("WAG") is that we begin the refill season with storage 250 to 300 Bcf below the 5-year average.

The U.S. natural gas market is very tight. Over the last 13 weeks (a quarter of the year) draws from storage have exceeded the 5-year average by 143 Bcf. Over the last 8 weeks we've seen 7 of 8 draws over the 5-year average. Well freeze offs and high demand for US LNG are the primary reasons for the tightness.

Weather in April will be very important this year. If we have a cool spring that results in only a small storage build in April and May, it will be very bullish for natural gas prices.

Demand for U.S. LNG should remain high all year. Natural prices in Europe and Asia are still very high (over $30/MMBtu).

The APR22 NYMEX contract for HH gas is trading over $4.70 and the strip goes higher over the next 12 months. DEC22 and JAN23 contracts are over $5.00.