Natural Gas Storage Report: Injection Season Week 11 (Week Ending June 16, 2017)

Mitch Marzuola, Energy Pricing Analyst

Expectation nearly met with reality this week as the net change of 61 Bcf only slightly eclipsed the proposed 58 Bcf injection. Part of this thin build, coming in under last year’s value of 63 Bcf and the five-year average of 82 Bcf, was influenced by the ongoing Tropical Storm Cindy, which diminished production in the Gulf of Mexico to levels below 2 Bcf/d for the first time since Tropical Storm Karen in October 2013. Even in the face of a bearish result from this week’s build, bulls have been seeking out a chance to make a move, and the current injection, along with a forecast calling for maintained warmer weather models, might finally be the push they need to elevate the market back above $3/MMBtu as summer marches on.

Working natural gas inventories currently stand at 2,770 Bcf. This figure is 324 Bcf (10.5%) less than this time last year and 207 Bcf (8.1%) above the five year average.

The July 2017 NYMEX Futures price started at $2.90/MMBtu prior to the report’s release and has since elevated to $2.92/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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