Natural Gas Short-Term Storage Outlook

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Includes: BOIL, DCNG, DGAZ, GAZ, KOLD, UGAZ, UNG, UNL
by: Robert Boslego

Summary

Storage build of 7 bcf reported today.

Draw of 55 bcf expected next week.

Waiting for confirmation that we have hit lows.

The Energy Information Administration (EIA) reported that natural gas in underground storage built by 7 billion cubic feet (bcf) in the week ending February 24th. This left storage levels 7.3% lower than a year ago, but 14.3% higher than the five-year average.

Looking ahead, market expectations for storage changes for the week ending March 3rd are a draw of 55 billion cubic feet bcf. That compares unfavorably to a draw of 63 bcf last year and a five-year average draw of 136.

In the four weeks ending March 24th, the data show a drop of 130 bcf. This average is 52 bcf faster than the same weeks last year, but about 139 bcf slower than the five-year average.

Storage Changes

2017

2016

Five-Year

3/3/2017

-55

-63

-136

3/10/2017

-45

-9

-85

3/17/2017

-17

13

-21

3/24/2017

-13

-19

-27

Total

-130

-78

-269

The end-of-season storage level is now expected to be 2,100 bcf. That is 377 bcf lower than last year, but 302 bcf higher than the five-year average.

End of Draw (BCF)

2017

2016

Five-Year Average

Max

Min

7-Apr

2,100

2,477

1,798

2,482

837

Looking further down the road, the market now expects storage to peak at 3,715 bcf in the fall. That is 294 bcf lower than a year ago, and 146 bcf lower the five-year average.

End of Storage (BCF)

2017

2016

Five-Year Average

Max

Min

3-Nov

3,715

4,009

3,861

4,009

3,588

Conclusions

We may be near the lows in natural gas futures prices, but I prefer to wait for confirmation. If you would like information about my natural gas signal service (red, yellow, green), message me.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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