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Natural gas storage build well below expectations, averages

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Essential Energy Insights - January 2021


Natural gas storage build well below expectations, averages

The U.S. Energy Information Administration reported a net 42-Bcf injection into natural gas inventories in the Lower 48 during the week that ended Sept. 29 that was well below market expectations and historical averages.

The market consensus ahead of the report's release called for a 51-Bcf build to stocks against respective year-ago and five-year average injections of 76 Bcf and 91 Bcf.

The build brought total U.S. working gas supply to 3,508 Bcf, or 161 Bcf below the year-ago level and 8 Bcf below the five-year average storage level of 3,516 Bcf. The report marked the first time total working gas stocks were below the five-year average since the week that ended Jan. 20. The surplus peaked at 395 Bcf in the week that ended March 10.

November natural gas futures were higher ahead of the 10:30 a.m. ET release of the latest storage data, trading from $2.922/MMBtu to $2.976/MMBtu and moving 3.4 cents higher at $2.974/MMBtu just in front of the release. In a knee-jerk response to the figure's miss against expectations and averages, the contract jumped to $2.995/MMBtu but reversed to trade just 1.5 cents higher at $2.944/MMBtu at last look.

In the East, inventories were up 13 Bcf on the week at 861 Bcf, or 3.8% below the year-ago level. Storage levels in the Midwest were up 25 Bcf at 989 Bcf, or 5.0% below the year-ago level. In the Mountain region, storage levels were up 3 Bcf on the week at 220 Bcf, or 6.8% below the year-ago level, while in the Pacific region, storage levels were up 4 Bcf at 311 Bcf, or 2.2% below the year-ago level. In the South Central region, where storage levels were down a net 3 Bcf on the week, stocks are at a deficit of 4.3% to a year earlier.

Working gas stocks in the South Central region totaled 1,127 Bcf, with 300 Bcf in salt cavern facilities and with 827 Bcf in non-salt cavern facilities. Working gas stocks were down 5 Bcf in salt cavern facilities and up 2 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.