The U.S. Energy Information Administration reported a weekly increase of 98 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending May 31, 2024 (Link to Report). This brings total inventories to 2,893 Bcf, 373 Bcf (15%) higher than year-ago levels and 581 Bcf (25%) above the average for 2019-2023 for the same week.
Today’s EIA report showed a build that came in above market expectations but was yet again smaller than historical benchmarks. This marks the fourth straight week in which the storage injection came up shy of both the same week last year and the five-year average. Over that stretch, the surplus to year-ago storage has narrowed by 71 Bcf, while stocks have lost 59 Bcf to the five-year average. This week’s reported build, however, was much closer to these benchmarks than what has been observed over the previous three weeks, perhaps as a result of the uptick in estimated natural gas production during the report week.
History suggests that today’s report could mark the largest weekly injection of the spring. Cooling load is ramping up rapidly at this point in the season, and current projections for the next several weeks suggest a series of progressively smaller builds.
The market response to today’s report has been initially bearish since most published forecasts were calling for a lighter build below 90 Bcf. The prompt-month July 2024 NYMEX contract had pushed as high as $2.877 per MMBtu in the hour prior to the EIA report. However, the stronger-than-expected nature of the data prompted a sell-off in the wake of the release, bringing benchmark pricing closer to flat on the day back below $2.80 per MMBtu as of 11am EDT.
On a regional level, the East and Midwest Regions saw weekly builds that outpaced last year and the five-year average, expanding the surplus to each benchmark. The build in the Mountain Region was in line with benchmarks, with stocks in that area maintaining a dramatic surplus of more than 65% above the five-year norm.
The South Central and Pacific Regions each saw relatively small injections compared to historical benchmarks, with South Central stocks now resting only marginally above the five-year high for the same week.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF below: