Natural gas storage inventories increased by 20 Bcf for the week ended July 28, per EIA. The build was in line with most market expectations and prices remained relatively flat with the prompt month contract (Sept 2017) trading at $2.8 per MMBtu following the EIA report and at time of writing.

Working gas storage inventories increased to 3.010 Tcf, level 279 Bcf above last year and only 87 Bcf above the 5-year average. The gap to both historical averages continues to tighten this week with a lower-than-average build.

See Drillinginfo EIA’s chart below. This graphic shows projections for end-of-season inventories as of Nov 1. Two scenarios are included for summer injections (April-Oct) that result in inventories between 3.69 Tcf and 3.98 Tcf. For the first time during this injection season, the high end of the range reaches a level below 4 Tcf. The high end of the range was 4.2 Tcf when the injection season started.

This Week In Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending 8/3.

  • Supply: dry gas production reached 73 Bcf/d on 8/1, but due to a pipeline force majeure on REX, average production for the week is down 160 MMcf/d. This pipeline disruption is expected to end today. Total supply is up 160 MMcf/d led by a 330 MMcf/d increase in Canadian imports.
  • Demand: cooler temperatures continue to impact power burn this week, down almost 2 Bcf/d from last week. Total demand is down 2 Bcf/d.
  • Storage: an injection in the high 30s Bcf is expected to be released by EIA next week due to weak demand.

 

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