Natural Gas Storage Report - March 20

[dan_s]

Working gas in storage was 953 Bcf as of Friday, March 14, 2014, according to EIA estimates. This represents a net decline of 48 Bcf from the previous week. Stocks were 932 Bcf less than last year at this time and 876 Bcf below the 5-year average of 1,829 Bcf. In the East Region, stocks were 399 Bcf below the 5-year average following net withdrawals of 35 Bcf. Stocks in the Producing Region were 351 Bcf below the 5-year average of 742 Bcf after a net withdrawal of 11 Bcf. Stocks in the West Region were 126 Bcf below the 5-year average after a net drawdown of 2 Bcf. At 953 Bcf, total working gas is below the 5-year historical range.

Some traders were expecting a bigger draw. 10-20 bcf one way or the other doesn't make much difference at this point. Storage will drop to around 850 bcf before refill season begins in April. The weather forecast for the last week of March is one last blast of winter in the NE quarter of the U.S.

NYMEX gas is down about 10 cents an mmbtu in reaction to this report. If I were a advisor to a utility company that needs a lot of gas for next winter, I would recommend buying Sept and Oct contracts today.

IMO how refill season begins is now the most important thing to watch. If refills start slowly, compressing refill season before next winter arrives, then it could get very interesting for natural gas prices.