Friday, August 23, 2013

Natural Gas Storage Projection

Yesterday's 57 BCF injection reported by the EIA was well below consensus.  Upcoming weather is also warmer than normal.  This lowers the season end storage range, and the midpoint is now 3.904 TCF on Nov 15th:

Reasonable weather variations, price-driven changes, and other changes in supply and demand result in a range of 3.73 to 4.07 as a confidence interval.  That's about a 350 BCF range.

Injections for the next three weeks will remain low due to warm weather.  September should bring weekly injections up into the 80 - 100 BCF range.

As the Atlantic remains quiet nearly 50% into hurricane season, the significant fundamental influences on gas  are going to be any heat waves in the distant forecast, and the critical influence of price on natural gas use in the electric power sector during the shoulder months of Sep-Oct-Nov.