EIA Reports Gas Draw Above Expectations, Full Impact of COVID-19 Yet To Be Seen

Natural gas storage inventories decreased 29 Bcf for the week ending March 20, according to the EIA’s weekly report. This was larger than the expected draw of 26 Bcf. Working gas storage inventories now sit at 2.005 Tcf, which is 888 Bcf above inventories from the same time last year and 292 Bcf above the five-year average. Prior to the storage report’s release, the April 2020 contract was trading at $1.642/MMBtu, roughly $0.017 below yesterday’s close. After the release of the report and at the time of writing, the April 2020 contract was trading at $1.641/MMBtu. The natural gas market is in an interesting and unpredictable time right now. On one hand, the OPEC+ cuts falling apart and crude prices taking a tumble have operators reducing CAPEX and cutting their drilling plans for 2020, which will lead to less associated natural gas. However, on the other hand, we have the COVID-19 pandemic, which has tens of millions of Americans under stay-at-home orders. These orders keeping people at home mean that a number of businesses and industrial facilities are closed. Ultimately, people staying at home will lead to less natural gas demand in the commercial and industrial sectors. As we are… continue reading

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Source: CTRM Center

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