The U.S. Energy Information Administration reported a weekly injection of 35 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending August 16, 2024 (Link). Total inventories now stand at 3,299 Bcf, 221 Bcf (7.2%) above year-ago levels and 369 Bcf (12.6%) above the 2019-2023 average for the same week.
This morning’s government report showed storage inventories increasing by the largest volume since the week ended July 5. The data stood in stark contrast to recent weeks that have seen storage numbers indicating tighter-than-expected market conditions. Expectations coming into this report called for a build ranging from 15 to 41 Bcf, with the consensus near 26 Bcf. The actual injection of 35 Bcf was bearish not only compared to most market forecasts, but it also came in stronger than 23-Bcf build reported during the same period in 2023. However, the weekly injection did fall shy of the five-year average for the same week, which shows an increase of 41 Bcf for the same week.
Compared to the previous week, which saw a 6-Bcf net deduction from inventories, today’s data suggests that the fundamental balance swung nearly 6 Bcf per day looser week over week. This can be chalked up mostly to milder temperatures on a population-weighted basis during the week ended August 16, but estimated power burn was down by only 3 Bcf per day compared to the previous week. Estimated weekly shifts in other aspects of the supply and demand balance were marginal, so the rest of the storage difference can likely be explained by fluctuations in salt cavern utilization in the South Central. This type of storage dropped by 14 Bcf during the previous week, but only declined by 6 Bcf during the week covered by today’s report.
Futures pricing was already down on the day prior to the report, and the market saw increased downward pressure immediately following the release. The prompt-month contract, which traded as high as $2.30 per MMBtu a week ago, is now testing new weekly lows near $2.05 per MMBtu in the hour following the storage report.
The Midwest and East Regions saw the largest weekly builds, with 12 and 19 Bcf being added to inventories in those areas, respectively. Pacific and Mountain stocks increased modestly, while overall South-Central inventories were unchanged on the week.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF Below: