Winter decided it wasn’t done yet as the Northeast and parts of the Plains were hit with a cold and snowy weather system last week, resulting in a 204 Bcf withdrawal that significantly widened deficits against last year’s inventories and draw of 88 Bcf along with the five-year average inventories and 99 Bcf pull for the same time period. Not only that, the daily power prices in the aforementioned regions and corresponding ISOs (MISO, SPP, and PJM) also managed to make notable jumps due to the colder temperatures and higher power demand. As withdrawal season is nearing a close, the remaining weeks are bringing a chill that “the front month could test resistance around $2.86-$2.91/MMBtu…”, according to Natural Gas Intelligence. Even with winter insisting on hanging around, its expected bullish effects are somewhat diminished due to EIA projecting that dry natural gas production will continue to break records throughout the rest of 2019 and even into 2020. The shoulder months could finally see NYMEX futures sticking to the rangebound trading below $3/MMBtu that we’ve grown to know, but summer is close behind, and the mix of heating and cooling demand in the first few weeks of injection season never fail to create some unpredictability in the market.
Working natural gas in storage currently stands at 1,186 Bcf, which is 359 Bcf (23.2%) lower than this time last year and 569 Bcf (32.4%) lower than the five-year average.
The April 2019 NYMEX Futures price began the day around $2.83/MMBtu prior to the report’s release, but increased to $2.84/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