Weekly Natural Gas Storage Report
Summary
- The report shows a change of -57 Bcf.
- This was 5 Bcf lower than our estimate of -62 Bcf and 1 Bcf lower than the consensus average of -58 Bcf.
- Our bullish position via a short in DGAZ was stopped out for a gain of 5.6%.
- Weather outlook along with higher than normal storage draws will keep prices supported for now.
Welcome to the Weekly Natural Gas Storage Report Edition of Natural Gas Daily!
The EIA reported a -57 Bcf change in storage, bringing the total storage number to 1.625 Tcf. This compares to the -57 Bcf change last year and -129 Bcf change for the five-year average.
Source: EIA
Going into this storage report, a Reuters survey of traders and analysts pegged the average at -58 Bcf with a range of -44 Bcf to -69 Bcf. We expected -62 Bcf and were 4 Bcf above the consensus. We were off by 5 Bcf on this storage report.
This week's storage report came in line with what consensus expected and lower than our estimate.
Looking at the weekly fundamental set-up over the next few weeks, colder than normal weather will push demand higher and result in higher than normal storage draws. We estimate that over the next four storage reports, storage draws will be 41 Bcf higher than the 5-year average. As a result, EOS has now been revised to 1.393 Tcf.
On the price action front, today's move saw us get stopped out of our DGAZ short position for a gain of 5.6%. Weather outlook for the rest of March remains supportive, and a combination of bullish weather and technical forces could see April test the 50-day moving average at $2.86/MMBtu. However, we think this would be where the upper price band is, and we would look to make a bearish trade when prices get there.
Of course, the weather outlook could remain supportive for the rest of March and into April, so we will be keeping a close eye on that.
For now, we are out of our bullish natural gas trade. Next week's storage draw is showing a preliminary draw of 100 Bcf.
HFI Research Natural Gas
Thank you for reading. If you have historically found our public natural gas articles insightful, you will certainly find our premium write-ups to be even better now. We have made major improvements over the last year incorporating a dedicated section on weather, trader commentary, and fundamentals. Now we are introducing what we would do with our positioning. If you are interested, you can see here more info.
This article was written by
The #1 natural gas research service on Seeking Alpha.
----------
HFIR Natural Gas prides itself in offering variant perception investment research in macro natural gas analysis.
Due to high demand for HFI Research's natural gas premium only offering, we have decided to launch a cheaper premium service, HFI Research Natural Gas, for natural gas followers.
----------
HFI Natural Gas Premium will offer the current exclusive natural gas content HFI Research subscribers currently receive, they include:
- Daily Natural Gas Fundamentals
- Storage Projection Updates
- "What Are The Traders Saying?"
- A community of natural gas traders and investors to bounce ideas off of.
----------
HFI Research Natural Gas will not include the other benefits HFI Research subscribers currently receive, and for those interested in our full offering, you should visit our main page for information:
https://seekingalpha.com/account/research/subscribe?slug=hfir
Analyst’s 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.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.