Natural Gas Storage: +69 Bcf
Natural gas stocks eclipse 3.9 Tcf with two November builds likely ahead
The U.S. Energy Information Administration reported a weekly injection of 69 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending November 1, 2024 (Link). Total inventories now stand at 3,932 Bcf, 157 Bcf (4.2%) above year-ago levels and 215 Bcf (5.8%) above the 2019-2023 average for the same week.
Natural gas stocks increased by 69 Bcf during what is traditionally considered the final week of summer for the market. Recent storage injections have added onto the surplus to historical benchmarks due to lingering mild temperatures in key market areas that have severely hampered space heating needs during the late part of the shoulder season. The 69-Bcf net addition dwarfed the 19 Bcf added during the same week a year prior and came in more than double the 32-Bcf build in the five-year average. Market expectations heading into today’s report centered around a build of 64 Bcf, with some analysts calling for an addition below 50 Bcf. The actual number came in closer to the top of the range, indicating that the implied fundamental balance was a bit looser than most estimated for the report week.
NYMEX futures pricing posted steep gains on Monday, but the market has generally softened since the beginning of the week. Prices were down this morning ahead of the EIA release, and the initial reaction to the data was tepid. The market seems to have already accounted for robust late-season additions to inventories, but it will be interesting to observe how traders respond to continued storage growth into November.
At the time of writing, the December 2024 NYMEX natural gas futures contract is trading at $2.668 per MMBtu, down $0.079 per MMBtu from yesterday’s settlement.
Today’s build included another robust addition to South Central inventories, with Salt storage levels jumping by 10 Bcf and Nonsalt increasing by 17 Bcf. Both the East and Midwest saw outsized injections as well, building back onto the surplus in both regions. The Mountain Region, where inventories reached all-time record levels, was the only area to see a net drawdown, as 1 Bcf was deducted from inventories.
What seemed highly unlikely as recently as a month ago now looks nearly inevitable. With especially mild weather forecast to persist through the middle of the month, inventories now appear poised to eclipse the 4-Tcf threshold for the first time since 2016 and only the third time on record. For reference, inventories reached an all-time record high of 4,047 Bcf on November 11, 2016, and we currently expect stocks to peak at 4,011 Bcf as of November 15, 2024, prior to the onset of net withdrawals the following week. Our very early outlook is for end-of-winter storage to hit a bottom between 1.9 and 2.0 Tcf, which carries high uncertainty depending on realized seasonal weather patterns.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF Below:
