The U.S. Energy Information Administration reported a weekly increase of 74 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending June 7, 2024 (Link to Report). This brings total inventories to 2,974 Bcf, 364 Bcf (14%) higher than year-ago levels and 573 Bcf (24%) above the average for 2019-2023 for the same week.
Today’s EIA report was a bit of a mixed bag. The headline number of the 74-Bcf build was right in line with consensus market expectations and marked the fifth consecutive week that storage grew at a pace slower than historical benchmarks. The five-year average build for the same week was 89 Bcf, and 90 Bcf was added to inventories during the same week a year prior. The surplus to both benchmarks continues to steadily narrow as the weeks go by.
However, the report also included a series of upward revisions to previous reports, with the net result being an additional 7 Bcf in working stocks in the Midwest Region that was previously unaccounted for. While this does not materially change the overarching storage situation, it does muddy the waters of what otherwise would have been a mostly bullish report.
The July 2024 NYMEX contract pushed as high as $3.159 per MMBtu on Tuesday, but in the wake of today’s storage announcement, the front of the curve is back below the psychologically important $3 level. Prices were already lower on the day prior to the EIA release, but the data prompted additional selling pressure immediately following the 10:30am news.
Today’s price action could prove pivotal for the marketplace. If July settles below the $3-per-MMBtu benchmark, the push experienced earlier in the week starts to look like a false breakout. However, if the bearish sentiment surrounding the storage report wanes and the market is able to claw back above that key price level, it would be a bullish near-term signal for pricing.
Stocks across all regions outside of the Pacific are above their respective historical ranges for the same week. The Midwest was the beneficiary of the revision to inventories and now has an extra 7 Bcf in storage. Meanwhile, Mountain Region stocks remain especially high for this time of year. Storage levels in that region sit nearly 65% above the five-year average for the same week and are already within 32 Bcf, or 13%, of their 2023 peak with most of the injection season still ahead.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF below: