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Natural gas storage defies outlooks with storage build of 2 Bcf

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Natural gas storage defies outlooks with storage build of 2 Bcf

The U.S. Energy Information Administration reported a net 2-Bcf injection into natural gas inventories in the Lower 48 during the week ended Dec. 1 that defied market expectations and historical averages.

The market consensus ahead of the report's release called for a 7-Bcf drawdown from stocks, against respective year-ago and five-year average withdrawals of 43 Bcf and 69 Bcf.

The build brought total U.S. working gas supply to 3,695 Bcf, or 264 Bcf below the year-ago level and 36 Bcf below the five-year average storage level of 3,731 Bcf.

January 2018 natural gas futures were sharply lower ahead of the report's release. The contract was 13.7 cents lower on the session at $2.785/MMBtu at 10:29 a.m. ET. The contract stalled immediately following the data's release and then extended the downside to a $2.766/MMBtu low while moving last 14.5 cents lower on the session at $2.777/MMBtu.

In the East, inventories were down 8 Bcf on the week at 868 Bcf, or 3.7% below the year-ago level. Storage levels in the Midwest were down 10 Bcf at 1,058 Bcf, or 5.1% below the year-ago level. In the Mountain region, storage levels were flat on the week at 221 Bcf, or 13.7% below the year-ago level, while in the Pacific region, storage levels were down 1 Bcf at 313 Bcf, or 3.4% below the year-ago level. In the South Central region, where storage levels were up a net 21 Bcf on the week, stocks are at a deficit of 9.5% to a year earlier.

Working gas stocks in the South Central region totaled 1,235 Bcf, with 360 Bcf in salt cavern facilities and with 875 Bcf in non-salt cavern facilities. Working gas stocks were up 12 Bcf in salt cavern facilities and up 9 Bcf in non-salt cavern facilities since the previous week.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power, natural gas index prices, as well as forwards and futures, visit our Commodities pages.