Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 93Bcf (billion cubic feet) from Underground Storage for the week ending March 9th, 2018.

This is 7Bcf below the median forecast of a 100Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal one year ago was 55Bcf and the 5-year average withdrawal is 97Bcf. Storage is 718Bcf below last year for the same week and 296Bcf below the 5-year average. Working gas in storage stands at 1,532Bcf.

Natural Gas Pricing


As of 9:35AM CST, April 2018, (the prompt month) Natural Gas was trading at $2.70, -$0.06 from one week ago and the 1-Year Spread average was $2.89, -$0.03 from one week ago.

Crude Oil Pricing


As of 9:00AM CST, April, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $61.44, +$1.10 from one week ago.

Crude Oil Inventory

US crude inventories declined by 6.3 million barrels to 418.9 million barrels for the week ended March 9th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected a drop of 4.4 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were +7 at 188 for the week of March 9th. The number of rigs currently drilling for Natural Gas was 37 higher than last year’s level of 151.  US Rigs drilling for oil were -4 at 796. There are 179 more rigs targeting oil than last year. Canadian rigs were -4 at 302 for the week. Rigs targeting oil drop 1% to 81% of all US drilling activity.

Geopolitical

HOUSTON -- During the final day of CERAWeek, Daniel Yergin, vice chairman of conference organizer IHS Markit, sat down with U.S. Senators John Cornyn (R-Texas) and Lisa Murkowski (R-Alaska, chairman of the U.S. Senate Energy and Natural Resources Committee), to discuss what’s ahead in Washington.

Both senators agreed that the American energy industry is moving in a more positive direction. “When you think about where we were last year, and where we are today, it is a world apart,” Murkowski said. “It is a bright new day.”

Weather

The AccuWeather 1-5 day Outlook forecasts below-normal temperatures for the Northeast, Florida, California and the upper Midwest. The South-Central part of the country is projected to be at  above-normal temps. The 6-10 Day Outlook forecasts similar temps but with expanded colder-than-normal temps in the North.

The 11-15 Day Outlook forecasts most of the Northern US at below-normal temps with most of the Southern states at above-normal temps. The 30 and 90-day Outlook projects the Southern states at above-normal temps and normal temps for the balance of the US.

Sustainability and Renewables


Nano…wood? Scientists have designed a heat-insulating material made from wood that is both light and strong and made entirely from tiny, stripped-down wood fibers.The so-called “nanowood”, described in the journal Science Advances, could one day be used to make more energy-efficient buildings. It's cheap and biodegradable, too.

"Nature is producing this kind of material," said senior author Liangbing Hu, a materials scientist and engineer at the University of Maryland in College Park. Managing heat is a major issue in the cities we build. It's hard to keep heat indoors in the winter and keep it outdoors in the summer. The insulating materials currently in use are often very expensive to make, both in terms of money and of energy. They're not usually biodegradable and ultimately contribute to our growing landfills. So scientists have been trying to come up with cheaper, more environmentally friendly options…

This Week's Key Takeaway

The 3d winter storm in 2 weeks in the Northeast has simultaneously caused demand destruction and greater demand for electricity. While power lines are down and many homes and business are not drawing power, the extreme cold in New England has caused greater need for heat. Much of this is covered by heating oil but there also has been a greater draw on Natural Gas than is normal for this time of year.

That said, Natural Gas prices have remained relatively low. The extreme weather has made forecasting prices and inventory levels for Natural Gas difficult, as the weather is unprecedented in recent history. Heat Rates for Texas and other states remain high, as there is still concern that the number of electric generators is not sufficient to power the grid this summer, due to shutdowns of older coal-fired plants. Electricity prices should come down as we move into spring and we see a net increase in underground storage of Natural Gas.

DOWNLOAD AND READ THE FULL NEWSLETTER >>>