EIA Natural Gas Storage Report - Aug 15
Posted: Thu Aug 15, 2024 9:53 am
Working gas in storage was 3,264 Bcf as of Friday, August 9, 2024, according to EIA estimates.
This represents a net decrease of 6 Bcf from the previous week. < We haven't had a draw from storage in August for over ten years.
Stocks were 209 Bcf higher than last year at this time and 375 Bcf above the five-year average of 2,889 Bcf.
At 3,264 Bcf, total working gas is within the five-year historical range.
Since April 19 the weekly storage builds have been below the 5-year average for 15 out of 16 weeks. The surplus to the 5-year average has declined by 290 Bcf during that period. < There are 13 weeks remaining in the refill season. My WAG is that the surplus to the 5-year average will be reduced to under 100 Bcf by the time draws from storage begin in mid-November. Keeping in mind that demand for U.S. gas is MUCH HIGHER than it was five years ago, as measured by "Days of Demand", U.S. natural gas storage levels will be near the bottom of the 5-year average when the winter of 2024-2025 begins.
I posted months ago that for U.S. natural gas prices to average more than $3.50/MMBtu in 2025 we needed three things to happen:
1. A warmer than normal summer to increase demand for ngas for power generation < We can check this one off.
2. Increasing LNG export capacity getting online in 2H 2024. < Freeport is back to full capacity and new high-capacity export facitilities at Plaquemines, Louisiana & Corpus Christi should be online in Q4.
3. A normal winter in the Eastern U.S. < That is the current forecast thanks to La Nina in the Pacific.
In six months, we will have a good idea if 2025 will be a good year for our gassers. A few more storage reports like the one we got today should push HH natural gas prices over $2.50 in September.
This represents a net decrease of 6 Bcf from the previous week. < We haven't had a draw from storage in August for over ten years.
Stocks were 209 Bcf higher than last year at this time and 375 Bcf above the five-year average of 2,889 Bcf.
At 3,264 Bcf, total working gas is within the five-year historical range.
Since April 19 the weekly storage builds have been below the 5-year average for 15 out of 16 weeks. The surplus to the 5-year average has declined by 290 Bcf during that period. < There are 13 weeks remaining in the refill season. My WAG is that the surplus to the 5-year average will be reduced to under 100 Bcf by the time draws from storage begin in mid-November. Keeping in mind that demand for U.S. gas is MUCH HIGHER than it was five years ago, as measured by "Days of Demand", U.S. natural gas storage levels will be near the bottom of the 5-year average when the winter of 2024-2025 begins.
I posted months ago that for U.S. natural gas prices to average more than $3.50/MMBtu in 2025 we needed three things to happen:
1. A warmer than normal summer to increase demand for ngas for power generation < We can check this one off.
2. Increasing LNG export capacity getting online in 2H 2024. < Freeport is back to full capacity and new high-capacity export facitilities at Plaquemines, Louisiana & Corpus Christi should be online in Q4.
3. A normal winter in the Eastern U.S. < That is the current forecast thanks to La Nina in the Pacific.
In six months, we will have a good idea if 2025 will be a good year for our gassers. A few more storage reports like the one we got today should push HH natural gas prices over $2.50 in September.