EIA Natural Gas Weekly Update, October 24

Following this morning's storage report that led a a bit of a relief rally, relief that for the first time in weeks the number did not exceed estimates (87 Bcf vs ests. 87 - 93 Bcf) and on the news that at least one shot of cold weather is heading south (ditto for Europe but that's a different market) front month November's were up 0.043 at 2.325  and soon-to-be front December's were up 0.042 at 2.469.

From the Energy Information Administration:
for week ending October 23, 2019   |  Release date:  October 24, 2019

In the News:
Natural gas inventories surpass five-year average for the first time in two years
Working natural gas inventories in the Lower 48 states totaled 3,519 billion cubic feet (Bcf) for the week ending October 11, 2019, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). That reporting period was the first week that Lower 48 states’ working gas inventories exceeded the previous five-year average since September 22, 2017, ending a 106-week streak of lower-than-average natural gas inventories. The surplus to the five-year average grew for the second week in row in the subsequent report week. Working gas inventories totaled 3,606 Bcf, or 28 Bcf higher than the five-year average as of October 18. Weekly injections have surpassed the five-year average for the past 10 weeks in a row, exceeding typical weekly injections for that time of year by about 19% on average. Continued strength in natural gas production could result in continued growth in the surplus to the five-year average in coming weeks.

The deficit also decreased because last year’s low inventory levels are now included in the previous five-year average. For this week, the preceding five-year average is about 124 Bcf lower than it was for the same week last year.

The figure shows working gas stocks in the Lower 48 states expressed as the difference from the preceding five-year average. The shaded regions in the figure represent the refill (injection) season, which typically runs from April through October, and the unshaded regions are the withdrawal (heating) season, which runs from November through the following March. The circled numbers represent specific time periods and associated circumstances

1. Injection season, 2017
   Working natural gas inventories in the Lower 48 states fell lower than the previous five-year average on September 2017, near the end of the refill season.


2. Withdrawal season, Winter 2017–18
   Episodes of relatively cold temperatures in the winter of 2017–18—including a bomb cyclone—resulted in record withdrawals from storage, increasing the deficit to the five-year average.


3. Injection season, 2018
   Several weeks of sustained colder-than-normal temperatures at the beginning of the refill season resulted in continued withdrawals from storage, increasing the deficit to the five-year average. The summer months experienced persistent warmer-than-normal temperatures, increasing electricity demand for natural gas and slowing natural gas storage injection activity.


4. Withdrawal season, Winter 2018–19
   By November 30, 2018, the deficit to the five-year average had grown to 725 Bcf. Inventories in that week were 20% lower than the previous five-year average for that time of year. Working gas stocks made some modest gains against the five-year average during the 2018–19 winter season, and gains in natural gas production more than offset increased natural gas consumption.


5. Injection season, 2019
   Throughout the 2019 refill season, record levels of U.S. natural gas production led to relatively high injections of natural gas into storage and reduced the deficit to the previous five-year average.

Overview:
(For the week ending Wednesday, October 23, 2019)

• Natural gas spot price movements were mixed this report week (Wednesday, October 16 to Wednesday, October 23). Henry Hub spot prices rose from $2.25 per million British thermal units (MMBtu) last Wednesday to $2.28/MMBtu yesterday.
• At the New York Mercantile Exchange (Nymex), the price of the November 2019 contract decreased 2¢, from $2.303/MMBtu last Wednesday to $2.282/MMBtu yesterday. The price of the 12-month strip averaging November 2019 through October 2020 futures contracts declined 3¢/MMBtu to $2.348/MMBtu.
• Net injections to working gas totaled 87 billion cubic feet (Bcf) for the week ending October 18. Working natural gas stocks are 3,606 Bcf, which is 17% more than the year-ago level and 1% more than the five-year (2014–18) average for this week.
• The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 8¢/MMBtu, averaging $5.20/MMBtu for the week ending October 23. The price of ethane, propane, and natural gasoline fell by 4%, 2%, and 1% respectively. The price of butane and isobutane remained flat week over week.
• According to Baker Hughes, for the week ending Tuesday, October 15, the natural gas rig count decreased by 6 to 137. The number of oil-directed rigs rose by 1 to 713. The total rig count decreased by 5, and it now stands at 851.

more summary data

Prices/Supply/Demand:
Prices rise at major hubs. This report week (Wednesday, October 16 to Wednesday, October 23), Henry Hub spot prices rose 3¢ from $2.25/MMBtu last Wednesday to a high of $2.28/MMBtu yesterday. Temperatures across the Lower 48 states were generally close to normal. At the Chicago Citygate, prices increased 18¢ from $2.11/MMBtu last Wednesday to a high of $2.29/MMBtu yesterday...

....MUCH MORE