Natural Gas Storage +52 Bcf
EIA reports a build in line with estimates.
The U.S. Energy Information Administration reported a weekly build of 52 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending June 21, 2024 (Link). Total inventories are now at 3,097 Bcf, 314 Bcf (11.3%) above year-ago levels and 528 Bcf (20.6%) above the 2019-2023 average for the same week.
The August 2024 NYMEX contract rolled onto the front of the forward curve yesterday upon the July contract’s expiration at $2.628 per MMBtu. Following the release of the report, the August contract bounced off of the daily lows and is now trading down just $0.021 on the day at $2.724 per MMBtu at the time of writing.
This week’s storage addition was virtually on par with the market’s expectations, which ranged from a build of 32 to 65 Bcf but centered around a 55 Bcf build. Our modeling shows this week in line with the previous report from a weather-adjusted perspective, suggesting there was little change in the underlying supply/demand balance. This report continued the trend of weekly storage additions lagging the historical benchmarks, marking the 7th consecutive weekly storage build that fell below the 5-year average build for the corresponding week. We project this trend to continue and are currently forecasting natural gas storage inventories to end October very close to 3,800 Bcf.
Looking at the regional breakdown, all regions posted smaller than average weekly changes with the Salt storage category within the South Central Region registering a small draw from inventories. Salt storage is typically used by merchant traders to capture spreads in cash pricing (i.e., storing inexpensive gas during periods of weak demand and selling into higher-demand periods) given its higher rates of injection and withdrawal relative to non-salt storage. Accordingly, the seasonality of salt storage typically sees inventories build during the spring, peaking around late June, and then being drawn down to supply power generation demand during the peak of the summer heat. Given that, we expect consistent declines in salt storage in the coming weeks with heat forecast for Texas and the Southeast. You can read more about the different types of natural gas storage facilities here: Link
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF Below:
