EIA - Natural Gas Storage Report - Nov 23
Posted: Wed Nov 23, 2022 12:26 pm
Working gas in storage was 3,564 Bcf as of Friday, November 18, 2022, according to EIA estimates.
This represents a net decrease of 80 Bcf from the previous week.
Stocks were 62 Bcf less than last year at this time and 39 Bcf below the five-year average of 3,603 Bcf.
At 3,564 Bcf, total working gas is within the five-year historical range.
Miss La Nina is now in control of the U.S. natural gas market. If we have a colder than normal December and Freeport LNG comes back online, we could see HH gas spike to over $10 in January. We are just one "Polar Vortex" away from a Super Spike.
A few things to remember:
> Demand for U.S. natural gas is much higher than it was five years ago.
> Refilling storage after the winter heating season ends is not an option. It must be refilled back to at least 3,500 Bcf before the next winter begins.
> Normally the first triple digit draw from storage happens the second week of December.
> My forecasts are based on HH ngas averaging $6.50 in 2023.
After 2023: As the U.S. gets more LNG export capacity, I expect HH ngas to drift toward 1/6th the price of WTI because it takes six mcf of gas to generate the energy in one barrel of crude oil. There has been a "Structural Change" in the U.S. natural gas market. After being oversupplied for ~14 years, the U.S. natural gas market is now back in balance.
It is VERY IMPORTANT that you know the production mix (crude oil, natural gas and NGLs) for each upstream company you own. I break out the mix at the bottom of each one of my forecast models. AR, CRK EQT, RRC and SBOW have the most exposure to natural gas prices. CRK is close to a "pure gasser" and it is going to generate outstanding results in Q4 and Q1.
This represents a net decrease of 80 Bcf from the previous week.
Stocks were 62 Bcf less than last year at this time and 39 Bcf below the five-year average of 3,603 Bcf.
At 3,564 Bcf, total working gas is within the five-year historical range.
Miss La Nina is now in control of the U.S. natural gas market. If we have a colder than normal December and Freeport LNG comes back online, we could see HH gas spike to over $10 in January. We are just one "Polar Vortex" away from a Super Spike.
A few things to remember:
> Demand for U.S. natural gas is much higher than it was five years ago.
> Refilling storage after the winter heating season ends is not an option. It must be refilled back to at least 3,500 Bcf before the next winter begins.
> Normally the first triple digit draw from storage happens the second week of December.
> My forecasts are based on HH ngas averaging $6.50 in 2023.
After 2023: As the U.S. gets more LNG export capacity, I expect HH ngas to drift toward 1/6th the price of WTI because it takes six mcf of gas to generate the energy in one barrel of crude oil. There has been a "Structural Change" in the U.S. natural gas market. After being oversupplied for ~14 years, the U.S. natural gas market is now back in balance.
It is VERY IMPORTANT that you know the production mix (crude oil, natural gas and NGLs) for each upstream company you own. I break out the mix at the bottom of each one of my forecast models. AR, CRK EQT, RRC and SBOW have the most exposure to natural gas prices. CRK is close to a "pure gasser" and it is going to generate outstanding results in Q4 and Q1.