Natural Gas Storage Report: Injection Season Week 12 (Week Ending June 23, 2017)

Mitch Marzuola, Energy Pricing Analyst

With the July contract month settling over $3/MMBtu, NYMEX may have finally found its floor for the summer. Today’s marginally bullish build came in at 46 Bcf, which was 6 Bcf short of the 52 Bcf market expectation. This injection only slightly surpassed last year’s value of 41 Bcf, but significantly fell short of the five-year average of 72 Bcf. Current forecasts from Genscape are projecting seasonal highs in gas-fired power burns (around 35 Bcf/d) after the July 4th weekend, and LNG exports are also looking at an increase of about 0.7 Bcf/d. These two factors, along with warmer weather models maintaining throughout the coming weeks, will need to hold steady in order to bolster a market that has seen a persistently shrinking surplus over the five-year average inventories. The delays in the Rover pipeline project continues to be noteworthy on this front as this project is slated to provide an increase of approximately 3.25 Bcf/d, effectively covering some of the apparent slip in the surplus.

Working natural gas inventories currently stand at 2,816 Bcf. This figure is 319 Bcf (10.2%) less than this time last year and 181 Bcf (6.9%) above the five year average.

The August 2017 NYMEX Futures price started at $3.07/MMBtu prior to the report’s release and has since inched up to $3.08/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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