Natural Gas Storage Report: Injection Season Week 18 (Week Ending August 4, 2017)

Mitch Marzuola, Energy Pricing Analyst

Cooler weather patterns across the Northeast and Rockies were offset by record heat across the Pacific coast this week as the latest injection of 28 Bcf failed to meet the market expectation of 36 Bcf. While this build may have surpassed last year’s value of 24 Bcf, it still fell rather short of the five-year injection of 54 Bcf. Working inventories continue to reflect an undersupplied market, and estimates of storage levels at the inception of withdrawal season sit around a range of 3.6-3.8 Tcf, a fair amount under the benchmark of 4 Tcf. In regards to supply, Phase 1A of the Rover pipeline, which continues to face delays, is scheduled to be completed by next week with Phase 2 fighting for a goal of coming online in early December. As we progress through the end of summer into shoulder season during the coming weeks, we hope to see somewhat of an increase in storage builds each week, but the persistent warm weather in the West and South may have other plans.

Working natural gas inventories currently stand at 3,038 Bcf. This figure is 275 Bcf (8.3%) less than this time last year and 61 Bcf (2.0%) above the five year average.

The September 2017 NYMEX Futures price started at $2.89/MMBtu prior to the report’s release and has since jumped to $2.96/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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