Natural Gas Storage Report: Injection Season Week 10 (Week Ending June 9, 2017)

Mitch Marzuola, Energy Pricing Analyst

After weeks of bearish activity, injection season finally took a turn in the bulls’ favor. Today’s build of 78 Bcf came up significantly short of the 86 Bcf market expectation, igniting the market in an upward trend that has been notably absent for the majority of the recently neutral shoulder season. This injection still managed to surpass last year’s almost equally thin build of 65 Bcf, but the five-year average stands strong at 92 Bcf, reflecting a slowly diminishing surplus. The impact of this declining surplus has yet to be seen, but that, along with what promises to be another warmer than normal summer, is looking to push the July contract month back over $3/MMBtu as we head into the cooling demand season.

Working natural gas inventories currently stand at 2,709 Bcf. This figure is 322 Bcf (10.6%) less than this time last year and 228 Bcf (9.2%) above the five year average.

The July 2017 NYMEX Futures price started at $2.94/MMBtu prior to the report’s release and has since jumped to $3.03/MMBtu following the EIA report.

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Outlook for the Balance of Storage Season:

The graph below compares historical 12, 24 and 36 month strip prices and storage levels for the past 5 years.

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The following table shows the injection numbers we will need to average by week to hit selected historical levels:

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The following two graphs show current natural gas in storage compared to each of the last 5 years and weekly storage averages and patterns.

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The graph below shows the injections through the current week over the past 5 years. 

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Finally, the graphic below depicts the 6 to 10 day temperature range outlook from the National Weather Service. 

Current Week's Outlook
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Future Outlook
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