Natural Gas Storage Report: Withdrawal Season Week 22 (Week Ending March 30, 2018)

Bryan Turk, Energy Pricing Analyst

Week 22 saw a drawdown of 29 Bcf, which was tighter than the Reuters average expectation of 26 Bcf. This year’s number exceeded 2017’s withdrawal of 4 Bcf, as well as the five-year average of 28 Bcf. The market has been bullish since, moving down more than 3 cents. While cooler than average weather continues to create late-season heating-demand, the market remains confident that injection season will refill the depleted stocks prior to the winter of 2018-2019.

In potentially significant weather-related news, the 2018 Hurricane Forecast was released this week by Colorado State University. The report is calling for above average activity in the Atlantic Ocean. While an active 2017 hurricane season did little to disrupt production, we are entering this injection season with 34% less gas in storage than at this time last year. Read more on this report here.

Withdrawal season concludes with working natural gas inventories of 1,354 Bcf. This figure is 697 Bcf (34%) less than this time last year and 347 Bcf (20.4%) below the five year average.

The May 2018 NYMEX Futures price started around $2.698/MMBtu prior to the report’s release and has since decreased to $2.664/MMBtu.

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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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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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