The final day of March concluded the official 2016-2017 Withdrawal Season, and with it came a relatively expected 2 Bcf injection. Though market expectations of a 7 Bcf build slightly missed the mark, this is historically well above the five year mean of a 34 Bcf withdrawal. Moderate temperatures prevailed through the key heating demand markets of the Northeast and Midwest last week, but short term models point to warmer weather to come through mid-April. Traders are treating this report as an overall neutral event, as steadily increasing natural gas rig counts may support production and thusly storage numbers in the near term before Summer, when we see a shift to major power demand markets in the South.
Working natural gas inventories currently stand at 2,051 Bcf. This figure is 427 Bcf (20.8%) less than this time last year and 265 Bcf (12.9%) above the five year average.
The May 2017 NYMEX Future was slightly elevated at $3.29/MMBtu prior to the report’s release, and has since continued to rise to over $3.33/MMBtu.
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.
The following table shows the injection numbers we will need to average by week to hit selected historical levels:
The following two graphs show current natural gas in storage compared to each of the last 5 years and weekly storage averages and patterns.
Finally, the graph below shows the injections through the current week over the past 5 years.