Natural Gas Storage Report - April 21

[dan_s]

Working gas in storage was 2,484 Bcf as of Friday, April 15, 2016, according to EIA estimates. This represents a net increase of 7 Bcf from the previous week. Stocks were 881 Bcf higher than last year at this time and 811 Bcf above the five-year average of 1,673 Bcf. At 2,484 Bcf, total working gas is within the five-year historical range.

If storage adds can stay this small for a few more weeks, it bodes well for prices.

This is the "Shoulder Season". Normal Builds this time of year:
Mid-April to Mid-May are 50-60 Bcf each week
Mid-May to Mid-June are 80-100 Bcf each week

Starting Mid-June demand from natural gas powered "peaking" electrical plants really picks up and the weekly builds go down. All we need is a normal summer season and storage will be back to the 5-year average before next winter starts.

[bearcatbob]

"If storage adds can stay this small for a few more weeks, it bodes well for prices. "

There have been two cold weeks in the upper Midwest and likely the North East. Those two weeks are over and this week has been a sunscreen on the golf course week in NE Ohio.

Those two weeks are history and do not look to be repeating.

http://wxmaps.org/pix/temp1.html

IMO the storage numbers for the last 2 weeks have been purely weather - and with the weather changing - there is no reason to not expect BIG BUILDS in the immediate future.

Bob

[dan_s]

Bob;

As I have posted here about a hundred times, I DO NOT EXPECT A SIGNIFICANT MOVE UP IN GAS PRICES UNTIL THE U.S. NATURAL GAS MARKET TIGHTEN. That said, U.S. natural gas production is now on steep decline, especially the associated gas coming from the Eagle Ford. See table at the link below.

http://www.eia.gov/petroleum/drilling/#tabs-summary-2

So, U.S. production and imports from Canada are declining by 0.50 Bcf per day PER MONTH and demand for gas is going up 2.5 to 3.0 Bcf per day this summer. This is a recipe for higher gas prices in the fall.

Again, "in the fall".

Take a look at the NYMEX strip for natural gas prices and you can see that the traders see this as well.