DI Blog

Insights across the energy value chain

Natural gas storage inventories increased by 69 Bcf for the week ending Sep. 7, according to the EIA’s weekly report. This injection is above market expectations, which were 65 Bcf. Before the EIA release, the October 2018 contract was trading at $2.848 per MMBtu, slightly higher than the October 2018 close yesterday of $2.829. After the EIA release and at the time of writing, the October 2018 contract was trading at $2.846, similar to before the EIA release.

Working gas storage inventories now sit at 2.636 Tcf, which is 662 Bcf below last year and 596 Bcf below the 5-year average.

See the chart below for projections of the end-of-season storage inventories as of Nov. 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 September 13, 2018.

Supply:

  • Dry gas production is up 0.295 Bcf/d week-over-week, with total dry production at 83.26 Bcf/d. The Northeast (+0.265 Bcf/d) and Texas (+0.229 Bcf/d) were the main contributors in the production increase. Notable production decreases came from the Rockies (-0.176 Bcf/d). Tropical Storm Gordon still has production down in the GoM – expect those volumes to return in the coming weeks.
  • Canadian Imports are down 0.45 Bcf/d week-over-week, bringing Canadian Imports to 4.43 Bcf/d.

Demand:

  • Domestic natural gas demand decreased 1.72 Bcf/d week-over-week, with the decrease attributable to power burn (-4.01 Bcf/d) and the offset in ResCom (+2.14 Bcf/d). Total domestic demand decreased to 59.38 Bcf/d for the week.
  • LNG exports were up 0.20 Bcf/d week-over-week, while Mexican Exports were down 0.31 Bcf/d.

Total supply is down 0.16 Bcf/d and total demand is down 2.02 Bcf/d week-over-week. With the decrease in demand outpacing the decrease in supply, expect EIA to report a higher injection next week. The ICE Financial Weekly Index report is currently expecting an injection of 81 Bcf for next week. Last year’s injection for the same week was 97 Bcf, while the 5-year average is 78 Bcf.

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