DI Blog

Insights across the energy value chain

Natural gas storage inventories increased by 70 Bcf for the week ending August 24, according to the EIA’s weekly report. This injection is slightly higher than the market expectation, which was an injection of 65 Bcf. The October 2018 contract closed yesterday at $2.863, and at the time of writing, the October 2018 contract was trading at $2.863. The September 2018 contract expired at $2.895.

Working gas storage inventories now sit at 2.505 Tcf, which is 646 Bcf below last year and 588 Bcf below the 5-year average.

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 August 30, 2018.

Supply:

  • Dry gas production is flat week-over-week, with total dry production at 82.64 Bcf/d. However, we did see some significant movement out of the Northeast (+0.47 Bcf/d) and Texas (-0.39 Bcf/d).
  • Canadian imports are up 0.67 Bcf/d week-over-week, bringing Canadian Imports to 5.60 Bcf/d.

Demand:

  • Domestic natural gas demand increased 2.12 Bcf/d week-over-week, with the increase attributable to power burn (+3.02 Bcf/d) with a slight offset in Res/Com (-0.85 Bcf/d). Total domestic demand increased to 63.13 Bcf/d for the week.
  • LNG exports were up 0.24 Bcf/d week-over-week, while Mexican Exports were down 0.1 Bcf/d.

Total supply is up 0.65 Bcf/d, mostly due to Canadian Imports, and total demand is up 2.48 Bcf/d week-over-week. With the increase in demand over supply, expect EIA to report a lower injection next week. The ICE Financial Weekly Index report is currently expecting an injection of 70 Bcf for next week. Last year’s injection for the same week was 65 Bcf, while the 5-year average is 62 Bcf.

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