2013 August 23

The Master Resource Report 2013-08-23

Natural gas

Yesterday the EIA released its natural gas storage report that showed a lower than expected injection. A survey of Bloomberg analysts predicted an increase of 66 Bcf while the actual build was 57 Bcf. Gas in storage now stands over 7% below year ago levels. (Bcf = billion cubic feet)

The two graphs below provide some historical perspective on the current storage situation.

The first graph compares two five year averages to the current storage levels. The black line is comparison to the trailing five year average for 2008-2012 while the red line is for the preceding period 2007-2011. The reason for showing both concerns the extraordinary storage bulge that occurred in 2012 due to the very warm winter. This is shown by the storage levels in March 2012 that were 60% above the 5 year average. The red line gives a comparison without the impact of that very low demand winter season in 2012.

Currently the storage is 1.5% above the 2008-2012 period and 3.8% above the 2007-2011 average. It is worth noting however that east region is 11.7% below year ago levels and 6.4% (103 Bcf) below the five year average.

The second graph illustrates gas in storage back to January 2007. The red dots represent the storage levels reported by the EIA for the second week of August each year. The current level of 3,063 Bcf is very close to the average for the second week of August for the last 5 years which is 3,075 Bcf.

The graph also shows just how extraordinary the impact on storage the warm winter of 2012 had on storage. It finished the 2012 winter season nearly 1,000 Bcf above typical levels.

The EIA is forecasting 3.8 trillion cubic feet of natural gas will be in storage by the beginning of the winter heating season. Which will be about in line with historic levels over the last 4 years.

Natural gas storage 2013-08-22

Click image for larger view.