EIA - Natural Gas Storage Report - Feb 16

[dan_s]

Working gas in storage was 2,266 Bcf as of Friday, February 10, 2023, according to EIA estimates.
This represents a net decrease of 100 Bcf from the previous week. < Compares to my WAG of 150 Bcf.
Stocks were 328 Bcf higher than last year at this time and 183 Bcf above the five-year average of 2,083 Bcf.
At 2,266 Bcf, total working gas is within the five-year historical range.

There are 7 more weeks of draws from storage to get to March 31.

My updated WAG for the storage level on March 31, 2023 is 1,671 Bcf. < Compares to the 5-year average of 1,540 Bcf.

A colder than normal March and getting the Freeport LNG export facility back online would push natural gas prices higher. Regardless, of where ngas storage is on March 31, there is not a "glut" of natural gas in the U.S. market. As we learned from the Comstock conference call yesterday, the "gassers" will be reducing their active rig count and holding off on completing new wells into a low priced gas market. Market Forces will balance the U.S. gas market. LNG prices in Asia and Europe are currently over $17.00/MMBtu, so demand for U.S. LNG will remain HIGH all year.

Here are the natural gas prices that I will be using in all of my undated forecast models:
2023
Q1 > $2.50
Q2 > $2.75
Q3 > $3.25 < by Q3 the utilities will be back in the futures market
Q4 > $3.50
2024 >> $4.00

[dan_s]

Trading Economics:
"Natural gas accounts for almost a quarter of United States energy consumption. The NYMEX Division natural gas futures contract is widely used as a national benchmark price. The futures contract trades in units of 10,000 million British thermal units (mmBtu). The price is based on delivery at the Henry Hub in Louisiana, the nexus of 16 intra- and interstate natural gas pipeline systems that draw supplies from the region's prolific gas deposits. The United States is the biggest natural gas producer followed by Russia. The Natural gas market prices displayed in Trading Economics are based on over-the-counter (OTC) and contract for difference (CFD) financial instruments. Our Natural gas market prices are intended to provide you with a reference only, rather than as a basis for making trading decisions. Trading Economics does not verify any data and disclaims any obligation to do so."

Go to this link ( https://tradingeconomics.com/commodity/natural-gas ) and click on the Forecast tab.

[ChuckGeb]

Antero has a slide in their presentation that shows peak to trough average drop in Haynesville rig count of 60% when gas breaks $3. The last such drop in February 2019 was 26 rigs or 44%. CRK announced a 22.2% drop. Slide shows there were 71 rigs working at the peak in August so if everyone follows CRK that would be 16 and if they follow 2019 that would be 31. As Kenneth Peak used to say "the solution to low gas prices is low gas prices".

[dan_s]

The utilities will rejoin the "Bidding War" this summer for physical delivery of the gas. Utilities are required to have enough gas in storage to meet estimated demand each winter. Refilling storage is not "optional" for the utilities that bring gas to your home or business.