Natural Gas Storage Report - October 6

[dan_s]

Working gas in storage was 3,680 Bcf as of Friday, September 30, 2016, according to EIA estimates. This represents a net increase of 80 Bcf from the previous week. Stocks were 74 Bcf higher than last year at this time and 205 Bcf above the five-year average of 3,475 Bcf.

The 80 Bcf injection compares to 5-year average build of 96 BCF.

This is the 22nd week in a row that the increase has been well below the 5-year average. Average difference has been ~28 Bcf per week, which is the largest delta I have ever seen for a period of this length. Gas in storage s/b below last year's level by the end of October and below the 5-year average by the end of November. The U.S. consumes ~8 Bcf per day more than it did 5 years ago, including the 2.5 Bcfpd increase in exports.

5-year average at beginning of winter heating season (mid November) is 3836 Bcf.

[dan_s]

Read this > http://business.financialpost.com/news/ ... =ff34-0d62

Weather has much more impact on natural gas demand than it did five years ago. This winter is expected to be much colder than last winter in the eastern half of the U.S. where most of the gas is consumed for space heating. If December is colder than normal (the current forecast) then we should see Ngas trading over $4/MMbtu by Christmas.

[bearcatbob]

This week's differential was one of the smallest of the summer. While the trend continues - I do not see any huge decrease that is not the result of a very hot summer.

Cold fall? LOL - we are having temps in the 80s here in mid October in NE Ohio. It is beautiful for golf and other outdoor activities. It is not indicative of a colder than normal winter. Trends in place seem to stay in place.

[bearcatbob]

FWIW - I keep a spread sheet using data from the American Oilman site suggested by Dan. I have added a four week moving average of the deltas. Here is the info as I have it - assuming I did the spread sheet correctly.


Week Ending
4 Wk Moving Ave

1-Apr-16
8-Apr-16
15-Apr-16
-4.75 22-Apr-16
-9 29-Apr-16
-9.25 6-May-16
-3.25 13-May-16
-15 20-May-16
-21.75 27-May-16
-22.75 3-Jun-16
-22.75 10-Jun-16
-22 17-Jun-16
-28.5 24-Jun-16
-31 1-Jul-16
-30.75 8-Jul-16
-30.75 15-Jul-16
-28.25 22-Jul-16
-32.5 29-Jul-16
-35.5 5-Aug-16
-37.75 12-Aug-16
-42.75 19-Aug-16
-34 26-Aug-16
-33.75 2-Sep-16
-26.75 9-Sep-16
-20.75 16-Sep-16
-27.5 23-Sep-16
-24.75 30-Sep-16

[grimaldi]

Here in NYC, it's been cool all week-- Week before that it was too hot, but changed very quickly.
Unfortunately, landlords don't have to turn on the heat until Oct 15th--- which I guess is the time
it's supposed to be needed. I've been wearing sweaters in my apartment, and turned out all my winter wardrobe to walk to work.

[dan_s]

22 straight weeks of storage builds below the 5-year average. During that time, only one week was even close to the 5-year average. Gas production in Texas is down 2 Bcfpd YOY. Demand is at least 2 Bcfpd higher YOY.

We CLEARLY have a much tighter U.S. natural gas market and the forecast is for a colder than normal winter.