Natural Gas Storage +71 Bcf
EIA reports storage volumes grew in line with expectations.
The U.S. Energy Information Administration reported a weekly build of 71 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending June 14, 2024 (Link) in a report released a day later than normal due to the Juneteenth Federal Holiday on Wednesday. Total inventories now stand at 3,045 Bcf, which is 343 Bcf (12.7%) above year-ago levels and 561 Bcf (22.6%) above the 2019-2023 average for the same week.
Following the release of the report, the July 2024 NYMEX natural gas futures contract immediately traded lower and is currently trading down $0.039 on the day at $2.702 per MMBtu. This caps off the second week of declining prices for the July contract, which will expire at the close of trading on Wednesday of next week.
This week’s reported build was in line with market expectations centering around a 70 Bcf build and marked the week when total inventories crossed 3,000 Bcf. Since 2009, this is the second earliest natural gas storage passed the 3,000 Bcf level with 2016 registering a slightly earlier breach of that threshold. To further highlight how high inventories currently are – or said another way, how far ahead of schedule the refill season is – in 2022, total inventories did not hit 3,000 Bcf until the report for the week ending September 30, 2022.
The stock story of elevated inventories is well-known at this point. The flow story, however, deserves closer examination. This was the sixth consecutive week (and the 11th of the last 14) in which the weekly storage build came in lower than the 5-year average build for the same week. When adjusting for weather, our modeling shows it as the tightest implied supply/demand balance since May 17. With temperatures expected to remain hot over the coming weeks leading to elevated natural gas demand for power generation and U.S. natural gas production volumes well-off their highs, there is little on the horizon to suggest that the trend of a steadily eroding storage surplus will end soon.
Looking at the regional breakdown, the surplus in the Mountain Region remains extreme while inventories in the Pacific Region have returned to the 5-year range after two weeks of relatively small storage injections.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF Below:
