Gas Injection Exceeds Market Expectation, Prices Fall

Natural gas storage inventories increased 84 Bcf for the week ending August 30, according to the EIA’s weekly report. This is higher than the market expectation, which was an injection of 76 Bcf. Working gas storage inventories now sit at 2.941 Tcf, which is 383 Bcf above inventories from the same time last year and 82 Bcf below the five-year average. Prior to the storage report release, the October 2019 contract was trading at $2.426/MMBtu, roughly $0.019 lower than yesterday’s close. However, prices continued to fall post report, and at the time of writing were trading at $2.400/MMBtu. Since last Thursday, prices have gained ~$0.10/MMBtu. The main driver of the price increase is the weather forecast. September temperatures are expected to be above average in the South/South Central, driving higher than normal power burn demand. Additionally, Hurricane Dorian shifted course as the storm headed toward the lower 48. Dorian, which made landfall in the Bahamas last weekend, then turned north to move up the East Coast. This change in path caused less rain and cooling in the southeastern portion of the US, and didn’t impact power demand as drastically as if the storm had trended inland. In the coming days,… continue reading

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Source: CTRM Center

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