Friday, September 2, 2016

Natural Gas: EIA Weekly Supply/Demand Report

With so much of current supply coming from land-based supply hurricanes just don't have the dramatic price effect they used to,
From the Energy Information Administration:
In the News:
Hurricane activity drives declines in Gulf of Mexico natural gas production
The potential for hurricanes in the Gulf of Mexico led to evacuations of personnel from offshore platforms and declines in Gulf natural gas production this week. Several producers, including Shell, BHP Billiton, Anadarko, and BP plc evacuated nonessential personnel from offshore facilities as a precaution against a tropical disturbance, currently known as Tropical Storm Hermine.

Declines in Gulf of Mexico production over the weekend were mostly concentrated on the Destin pipeline system, a BP subsidiary, according to PointLogic. The Destin pipeline is a major offshore interstate pipeline that receives natural gas produced from several offshore platforms and brings it to a processing plant in Pascagoula, Mississippi, before connecting with other major interstate systems. Two of these systems, Transcontinental and Texas Eastern Transmission, also posted large decreases on Tuesday, as noted by PointLogic.

The storm, which is expected to make landfall on the northeast Gulf Coast this evening, could also lead to reduced consumption of natural gas for power generation, because tropical wind and rain generally lead to cooler temperatures and lower demand for air conditioning.

Late August to early September is generally the most active time of hurricane season, and several storm systems are currently forming in the Gulf and Atlantic. While Gulf of Mexico natural gas production has declined substantially over the past several years, it still totaled 3.6 billion cubic feet per day in 2015, or about 4.6% of total U.S. production. EIA monitors tropical activity that could threaten energy infrastructure on its energy disruptions page....
Injections to storage continue at slower-than-normal rate. Net injections into storage totaled 51 Bcf, compared with the five-year (2011-15) average net injections of 67 Bcf and last year’s net injections of 88 Bcf during the same week. Working gas stocks total 3,401 Bcf, 334 Bcf above the five-year average and 238 Bcf above last year at this time. This week marks the 17th consecutive week that the gap of working gas stocks compared with the five-year average declined. When the refill season began on April 1, working gas stocks were 874 Bcf above the five-year average.

South Central Salt region falls below year-ago level for the first time in 2016. The South Central Salt region posted net withdrawals totaling 5 Bcf for the report week, bringing the working gas level to 2 Bcf below its year-ago level. Entering the refill season on April 2016, working gas in the South Central Salt region was 181 Bcf above the year-ago level. Since the beginning of the refill season net withdrawals from storage have totaled 36 Bcf, compared with the five-year average net injection of 71 Bcf and last year’s net injection of 147 Bcf over the same period. Nevertheless, working gas levels remain 28% above the five-year average for the region. The nonsalt facilities posted a 4 Bcf injection on the week, bringing its total net build for the refill season to 122 Bcf, compared with the five-year average of 257 Bcf.

Net injections exceed range of expectations. Estimates of net injections into storage generally ranged from 31 to 47 Bcf, with a median of 42 Bcf, according to Bloomberg. As a result, the price of the Nymex contract for October delivery at the Henry Hub fell 4¢/MMBtu to $2.80/MMBtu, in 1,388 trades at the release of the Weekly Natural Gas Storage Report. Prices stabilized somewhat in subsequent trading, averaging to $2.80/MMBtu, within two minutes of the release....

Front futures $2.8030 up 0.0110.
From FinViz: