Natural Gas Storage Report Injection Season Week 14 (Week Ending July 5th, 2019)

Even with impending tropical storms, the July 4^th holiday weekend, and summer heat finally making an appearance, this week’s storage build of 81 Bcf still exceeded market expectations, last year’s 55 Bcf injection, and the five-year average of 71 Bcf. While last week offered little in the realm of fundamental factors besides a mixed forecast, this week’s introduction of tropical storm Barry already has some offshore production shuttered as it approaches. The always difficult to nail down balance of production cuts and demand destruction will be a key aspect to watch as the storm is expected to cover the majority of Louisiana, a major location for LNG terminals and facilities. As for the remainder of the Lower 48, the Northeast is also currently seeing some precipitation that is forecast to deter some warmer weather seen earlier this week, but this current mix of fundamental factors will mostly be hinging on the state of onshore refineries in Louisiana and their ability to weather the incipient storm. Major power hub prices continue to be muted across the board save for a small jump on July 3^rd in ERCOT, but nothing notable or sustained. Speaking of sustained activity, any prolonged rain or storm surge due to Barry will be important to note over the weekend as well.

Working natural gas in storage currently stands at 2,471 Bcf, which is 275 Bcf (12.5%) higher than this time last year and 142 Bcf (-5.4%) lower than the five-year average.

The August 2019 NYMEX Futures price began the day around $2.44/MMBtu prior to the report’s release and increased to $2.47/MMBtu after the report was posted.