The EIA reported a weekly 78 Billion Cubic Feet (Bcf) weekly build in Lower 48 natural gas storage inventories for the week ending May 17, 2024. This compares to 97 Bcf build for the same week last year and an average build of 92 Bcf for the same week over the previous 5 years (2019-2023). This build continues the trend of weekly storage additions that lag the historical benchmarks, leading to a narrowing of the inventory surplus. To be sure, inventories remain very high for this time of year with current natural gas storage 606 Bcf (28.8%) above the 5-year average level.
The market expectations for the report centered around an 83 Bcf build, so this week marked the second consecutive report with a bullish surprise. That surprise has not translated into higher natural gas futures prices, however, as the soon-to-expire June NYMEX natural gas futures contract is trading lower on the day currently at $2.792 at the time of writing, down $0.05 per MMBtu from yesterday’s settlement. Today’s modest decline follows a month-long rally that has seen the June contract trade from a low of $1.907 to today’s high of $2.924.
Looking at the regional breakout (Link to the EIA Region Map), the East Region continues to see weekly builds above the 5-year average with the surplus to that benchmark reaching a new annual high with this report.
Natural gas inventories in the Mountain Region remain very elevated from a percentage perspective, with current storage 86 Bcf (74.1%) above the 5-year average for the same week. The Mountain Region is the smallest of the EIA regions, so that data point should be taken in context.
The South Central Region, especially important as it includes the Henry Hub, saw a below-average build for Non-Salt inventories with the surplus to the 5-year average in that sub-region the smallest on a percentage basis at 285 Bcf (11.9%) above the historical benchmark. Salt storage, faster cycling storage often used for trading rather than by utilities storing gas to meet customer needs in the winter, saw a build in inventories with storage buyers likely taking advantage of lower spot prices during the report week with plans to withdraw during hotter parts of the summer to serve power generation demand.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF below: