Natural Gas Storage: +21 Bcf
EIA reports another smaller-than-expected storage build.
The U.S. Energy Information Administration reported a weekly build of 21 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending August 2, 2024 (Link). Total inventories now stand at 3,270 Bcf, 248 Bcf (8.2%) above year-ago levels and 424 Bcf (14.9%) above the 2019-2023 average for the same week.
Today’s government report showed the second straight weekly build that lagged consensus market expectations. Forecasts heading into the release called for a build between 14 and 33 Bcf, with most expecting a build near 26 Bcf. The actual injection of 21 Bcf not only came in near the lower end of that range, but also fell short of the 38-Bcf five-year average build and the 25-Bcf build recorded during the same week in 2024. The surplus to the five-year average at 424 Bcf is now at its narrowest since mid-February, and inventories are back within the five-year range for the same week.
The 21-Bcf injection implies that the fundamental balance loosened by nearly 0.5 Bcf per day compared to the previous week when inventories increased by a reported 18 Bcf. However, estimated power generation demand and LNG exports during the most storage report week were both higher than the previous week. Against a backdrop of virtually flat domestic supply, the data at face value calls into question how today’s announced injection could have been stronger than the week prior. While it is possible that we could see some of the fundamental or storage data revised in the coming weeks, the most likely explanation is the severely limited wind output in Texas in recent weeks. This, along with the intrastate nature of most Texas natural gas deliveries, has made estimating South-Central supply and demand especially difficult in recent weeks.
Regardless of those details, the market responded to this morning’s report by jumping quickly off of the intraday lows. Futures pricing was higher for two consecutive days, but the market was in the process of giving back some of those gains earlier today. However, in the half hour since the EIA’s release, prices on the front of the curve are now up on the day more than 10 cents higherthe daily lows.
The South Central saw yet another net drawdown, as an estimated 7 Bcf was removed from salt cavern storage facilities. It is normal for salt storage to be drawn lower during peak summer months, with those inventories typically peaking in late June before declining through August. Due to the relatively mild temperature patterns observed in that part of the country, however, the salt drawdown has been lighter than the five-year average and year prior so far this summer. Inventories increased in every other region.
South Central Salt Storage Inventories
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF Below:
