The EIA reported a 70 Bcf build in Lower 48 natural gas storage inventories for the week ending May 10, 2024. This compares to a 93 Bcf build for the same week last year and a 90 Bcf build on average over the last 5 years. This was the 3rd consecutive build that lagged the 5-year average, leading to a contraction in the inventory surplus. The surplus remains extremely high, however, with 620 Bcf (30.8%) more gas in storage than the 5-year average level for this time of year.
The market was looking for an addition of 75 Bcf, so this week’s change is a bit of a bullish surprise but within the expected range of 66 to 90 Bcf. Lower production combined with lower wind generation and above-normal cooling demand led to this week’s build falling below historical comps.
Since the report’s release, the June 2024 NYMEX natural gas futures contract traded higher reaching a new daily high of $2.544 per MMBtu as of the time of writing. That is the highest the June contract has traded since Jan 25, 2024, and more than $0.63 (33%) off the low of mid-April.
Looking at the regional breakout (Link to the EIA Region Map), the builds in the East & Midwest regions were in line with the historical benchmark changes with the surplus to the 5-year average level at annual highs for both regions.
Despite a smaller-than-average build, gas inventories in the Mountain Region (the smallest of the storage regions) remain very elevated with current inventories at levels not usually seen until August.
In the South Central Region, Non-Salt inventories built lower than historical levels but remain elevated, while Salt storage facilities registered a small draw on the week.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF below: