Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 81Bcf from Underground Storage for the week ending January 11th, 2019.

This is 9Bcf below the median forecast of a 90Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal compares with -183Bcf last year and -203Bcf for the five-year average. Storage is 77Bcf below last year for the same week and 327Bcf below the 5-year average. Working gas in storage stands at 2,533Bcf. Read more.

Natural Gas Pricing


As of 9:53AM CST, February 2018, (the prompt month) Natural Gas was trading at $3.48, +$0.48 from one week ago and the 1-Year Spread average was $3.00, +$0.14 from one week ago.

Crude Oil Pricing


As of 9:12AM CST, February, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $51.50, -$0.26 from one week ago.

Crude Oil Inventory


US crude inventories decreased by 2.7 million barrels to 437.0 million barrels for the week ended January 11th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected a decrease of 1.3 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were +4 at 202 for the week of January 11th. The number of rigs currently drilling for Natural Gas was +15 from last year. US Rigs drilling for oil were -4 at 873. There are 121 more rigs targeting oil than last year. Canadian rigs were +108 at 184 for the week. Rigs targeting oil drop 1% to 81% of all US drilling activity.

Geopolitical


In 2016, the Bureau of Land Management (BLM) finalized common-sense standards to reign in the excessive waste of natural gas from oil and gas development on public lands. By curbing unnecessary venting, flaring and leaks at oil and gas facilities, the BLM’s Waste Prevention Rule would have helped to protect public health, reduce potent greenhouse gas (GHG) emissions, and recoup millions of dollars in revenue owed to American taxpayers.

Despite the rule’s broad support and numerous benefits, the Department of the Interior under Secretary Ryan Zinke has rolled back its most important protections. Under the agency’s replacement to the 2016 rule, the BLM will now, in many cases, rely on existing state requirements to regulate publicly owned oil and gas production. Unfortunately, policies to reduce natural gas waste vary significantly by state.

Weather

The AccuWeather 1-5 day Outlook forecasts below-normal temps for the Northeast and North-Central states, above-normal temps for the West and South and normal temps for the balance of the US. The 6-10 Day Outlook forecasts much of the US at below-normal temps with the exception of The Northwest, Far-West and Southeast at normal or above-normal temps. 

11-15 Day Outlook  forecasts below-normal temps for almost all of the US with the exception of the Northwest and Far-West, which are expected to be at normal or above-normal temps. The 30-day Outlook projects normal temps for most of the US except the West (not including California), which is expected to be above-normal and the Southeast, (with the exception of Florida) which is projected to be below-normal.

The 90-Day Outlook projects the Center of the country and East Coast at normal temps and much of the West at above-normal temps. Inland from the East Coast, there is a strip of below-normal temps projected from Maine to the Gulf.

Sustainability and Renewables


Turning Electricity into Hydrogen: Two power-to-gas projects promise to improve the technology. In Brandenburg, Germany, Edis and Gasag want to transform renewable power into hydrogen, driving sectoral coupling. And Sunfire has switched on its first co-electrolysis project.

Edis and Gasag have signed a cooperation agreement to develop a power-to-gas project in Havelland, Brandenburg. Through the project, electricity generated from renewable sources is converted into hydrogen by electrolysis. The ‘green’ hydrogen can then be fed into the gas network and stored and later used as an admixture with natural gas for power or heat generation. The hydrogen could also be used in fuel cell powered vehicles, according to the project‘s co-developers.

“Thus, power-to-gas as a so-called sector coupling technology makes a significant contribution to the successful energy transition in Germany,” said Edis and Gasag.The first phase of the project at the Ketzin site involves planning and approval of construction and operation of the plant.

This Week's Key Take-Away


A major change in the weather predictions has significantly altered the price of Natural Gas and Electricity nationwide as 2 Winter storms grip the country.
The first storm is expected to bring 2 to 4 inches of snow today and tomorrow from Indiana east to Pennsylvania, then into the interior Northeast. On Friday, major metro areas on the East Coast likely will face light snow during the morning commute. The storm should move so quickly that accumulations are expected to remain low in New York and Boston. The second storm is a much stronger system... as it exits the Rockies it will begin to drop snow late Friday across Kansas. Winds could gust up to 35 mph, causing blowing and drifting snow through Saturday night. This storm will bring extreme cold, especially in the Northeast.

The Electric and Natural Gas markets have risen dramatically this week, as concerns about storage and capacity drive prices. The Winter - just a few weeks ago projected to be warmer-than-normal, due to an El Nino, is now forecasted to be colder-than-normal, causing a massive jump in prices.