Natural Gas Storage Report: Injection Season Week 5 (Week Ending May 5, 2017)

Mitch Marzuola, Energy Pricing Analyst

The fifth week of injection season continued the trend of slim storage builds, as the bullish 45 Bcf injection came in lower than the market expectation of 53 Bcf. This build also underwhelms in comparison tho last year’s injection of 58 Bcf and the five year average of 73 Bcf. Initially, traders looked to remain neutral with minimal influence from weather-related fundamental factors yet again, but new export abilities (specifically LNG, or Liquefied Natural Gas), increase in power demand, and growing domestic consumption further push the case for an overarching bullish trend. Today’s injection certainly helped wake up the bulls as well.

On a similar note, The Midwest will be a region to watch as the Rover Pipeline project has been directed by FERC to cease horizontal direction drilling in some segments. Surrounding pipelines, including Consumers, Michcon, Alliance, and Chicago Citygate, all surged over at least ten cents after reports of the Rover delay. With a capacity of 3.25 Bcf/d, this 711 mile-long pipeline going offline, whether partially or temporarily, will see producers working hard to meet demand and capacity requirements.

Working natural gas inventories currently stand at 2,301 Bcf. This figure is 372 Bcf (13.9%) less than this time last year and 275 Bcf (13.6%) above the five year average.

The June 2017 NYMEX Future continued to rise to $3.33/MMBtu prior to the report’s release and has since climbed to $3.36/MMBtu following the 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. 

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