DI Blog

Insights across the energy value chain

Natural gas storage inventories increased by 96 Bcf for the week ending May 25, according to the EIA’s weekly report. This injection is slightly lower than what the market was expecting. Indications were suggesting that the report would show triple digit injection. Natural gas prices are trading slightly higher than yesterday’s close with the July18 contract trading at $2.97 per MMBtu, at time of writing. This is ~$0.09 higher than previous day close.

Working gas storage inventories now sit at 1.73 Tcf, which is 788 Bcf below last year and 500 Bcf below the 5-year average. For the injection season this year to end at 3.79 Tcf, the same level as 2017, average weekly injections this summer must average 90 Bcf.

See the chart below for projections of the end-of-season storage inventories as of November 1, the end of the injection season.

This Week in Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending May 31, 2018.

Supply:

–        Dry gas production is down 0.1 Bcf/d week-on-week. Gas production in Texas, Southeast, and Gulf of Mexico combined decreased by ~0.5 Bcf/d. Mostly offsetting increases are seen in the Rockies, Mid-Continent, and the Northeast, accounting for ~0.3 Bcf/d of increased production.

–        Canadian imports are up 0.2 Bcf/d week-on-week.

 

Demand:

–        Domestic natural gas demand decreased by 0.3 Bcf/d week-on-week. ResCom (-1.1 Bcf/d) decreased in consumption, while Power (1 Bcf/d) increased. These changes in demand can be attributed to warmer weather, causing less heating and more power generation.

–        LNG exports remained relatively flat week over week, and Mexican Exports are up 0.1 Bcf/d.

Total supply is up 0.1 Bcf/d and total demand is down 0.2 Bcf/d week-over-week. A stronger injection is expected next week. Last year’s injection for the same week was 106 Bcf while the 5-year average is 102 Bcf.

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