The market expectation of 66 Bcf was exceeded by a somewhat surprisingly robust build of 70 Bcf this week, supported mostly by the Midwest due to cooler than expected weather across the region. Despite warm overnight weather guidance, this week’s injection provided a bearish overall look, even in the face of hotter trends expected in the near future from September 6th to the 10th. Next week’s build may tell a different story however, as PJM issued hot weather alerts on Wednesday and Thursday that will be reflected in the next report that covers the current week. In other fundamental news, dry gas production continues to average 81.8 Bcf/d per S&P Global Platts and is expected to climb to 82.2 Bcf/d, creating another possible limit to any upward movement on NYMEX for the remainder of the shoulder months leading up to withdrawal season. In short, the market continues to trade sideways, but a better picture of what to expect for the winter ahead should become more clear over these last several weeks of injection season.
Working natural gas in storage currently stands at 2,505 Bcf, which is 646 Bcf (20.5%) lower than this time last year and 588 Bcf (19.5%) lower than the five-year average.
The October 2018 NYMEX Futures price began the day around $2.88/MMBtu prior to the report’s release, but has since fallen to $2.85/MMBtu after the report was posted.
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.
The graph below shows the injections through the current week over the past 5 years.
Finally, the graphics below depicts the 6 to 10 day temperature range outlook from the National Weather Service.
Current Week’s Outlook