Natural Gas Storage Report: Injection Season Week 11 (Week Ending June 15, 2018)

Cliff McGaha, Energy Markets Analyst

Week 11 of Injection Season provided a slightly bearish surprise, as the country rides out the tail end of a recent break from the heat. Today, the EIA reported a net injection of 91 Bcf in working natural gas as compared to market expectations of an 85 Bcf injection. This is fairly robust when juxtaposed with last year’s 61 Bcf inflow. Though production has still outpaced demand, despite several pipeline maintenance events, the natural gas surplus only now topped the 2 Tcf mark – our lowest for this point in the year since 2014. Once again, near-term storage numbers will remain a tipping point for market conditions, as upcoming weather models continue to trend hotter for the remainder of June and the first half of July.

Working natural gas in storage currently stands at 2,004 Bcf, which is 757 Bcf (27.4%) lower than this time last year and 499 Bcf (19.9%) lower than the five year average.

The July 2018 NYMEX Futures price began the day elevated over $3.00/MMBtu prior to the report’s release, but have since taken a dive to just over $2.95/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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