Tuesday, July 22, 2014

U.S. natural gas inventory growth resumes



Working gas in storage was 2,129 Bcf as of Friday, July 11, 2014, according to EIA estimates. This represents a net increase of 107 Bcf from the previous week. Stocks were 608 Bcf less than last year at this time and 727 Bcf below the 5-year average of 2,856 Bcf. In the East Region, stocks were 338 Bcf below the 5-year average following net injections of 65 Bcf. Stocks in the Producing Region were 303 Bcf below the 5-year average of 1,030 Bcf after a net injection of 29 Bcf. Stocks in the West Region were 86 Bcf below the 5-year average after a net addition of 13 Bcf. At 2,129 Bcf, total working gas is below the 5-year historical range.

natural gas storage of U.S


The net injection reported for the week ending July 11 was 107 Bcf, 42 Bcf larger than the 5-year average net injection of 65 Bcf and 45 Bcf larger than last year's net injection of 62 Bcf. Working gas inventories totaled 2,129 Bcf, 608 Bcf (22.2%) less than last year at this time, and 727 Bcf (25.5%) below the 5-year (2009-13) average.

Storage build is higher than market expectations. Market expectations called for a build of 100 Bcf. When the EIA storage report was released at 10:30 a.m., the price for the August natural gas futures contract decreased 8 cents to $3.97/MMBtu on the Nymex.

From the week ending on April 4 through the week ending on July 11, net storage injections have totaled 1,307 Bcf, versus 1,037 Bcf for the same 15 weeks in 2013, and 1,042 Bcf for these weeks between 2009 and 2013, on average. The average unit value of what storage holders put into storage from April 4 to July 11 was $4.55/MMBtu, 16% higher than the average value for the same 15 weeks last year of $3.94/MMBtu. The highest winter-month Nymex price (for the January 2015 contract) in trading for the week ending on July 11 averaged $4.40/MMBtu. This is 16 cents more than the current Nymex August contract price. A year ago, the difference was 33 cents/MMBtu, providing a bit more financial incentive to buy and store gas in the summer for sale in the winter.


Working gas storage of U.S


There are currently 16 more weeks in the injection season, which traditionally occurs April 1 through October 31; although, in many years, injections continue into November. EIA forecasts that the end-of-October working natural gas inventory level will be 3,431 Bcf, which, as of July 4, would require an average injection of 81 Bcf per week through the end of October. EIA's forecast for the end-of-October inventory levels are below the 5-year (2009-13) average value of 3,837 Bcf. To reach the 5-year average by October 31, average weekly injections through the end of October would need to be 107 Bcf.

All three regions post larger-than-average builds. The East, West, and Producing regions had net injections of 65 Bcf (21 Bcf larger than its 5-year average injection), 13 Bcf (5 Bcf larger than its 5-year average injection), and 29 Bcf (17 Bcf larger than its 5-year average injection), respectively. Storage levels for all three regions remain below their year-ago and 5-year average levels.

Temperatures during the storage report week were normal.Temperatures in the Lower 48 states averaged 74.7 degrees for the week, similar to the 30-year normal temperature and 3.0 degrees cooler than during the same period last year.

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