Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 36Bcf (billion cubic feet) from Underground Storage for the week ending April 13th, 2018.

This is 11Bcf above the median forecast of a 25Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The injection one year ago was 54Bcf and the 5-year average injection is 58Bcf. Storage is 808Bcf below last year for the same week and 449Bcf below the 5-year average. Working gas in storage stands at 1,299Bcf. This is interesting in light of the fact that Natural Gas production reached a new high this week.

Natural Gas Pricing

As of 9:32AM CST, May 2018, (the prompt month) Natural Gas was trading at $2.77, +$0.09 from one week ago and the 1-Year Spread average was $2.89, +$0.06 from one week ago.

Crude Oil Pricing

As of 8:48AM CST, May, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $68.91, +$2.83 from one week ago.

Crude Oil Inventory

US crude inventories decreased by 1.0 million barrels to 427.6 million barrels for the week ended April 13th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected an increase of 1 million barrels.

U.S. Rotary Rigs

U.S. Rotary Rigs drilling for natural gas were -2 at 192 for the week of April 14th. The number of rigs currently drilling for Natural Gas was 30 higher than last year’s level of 162.  US Rigs drilling for oil were +7 at 815. There are 132 more rigs targeting oil than last year. Canadian rigs were -9 at 102 for the week. Rigs targeting oil remain at 81% of all US drilling activity.

Geopolitical

(UPI) -- Moving U.S. energy supplies into Eastern Europe is one of the more powerful ways to contain Russian influence, the U.S. energy secretary said.

Addressing questions from Sen. Richard Blumenthal, D-Conn., on Russian actions, Perry said during testimony before the Senate Armed Services committee that he agreed that Russian cyberattacks on the U.S. energy sector were "an act of war" on the United States. The U.S. Treasury Department revealed last week that Russian government actors targeted "multiple U.S. critical infrastructure sectors.

Weather

The AccuWeather 1-5 day Outlook forecasts below-normal temps for the Eastern half of the US with the exception of Florida, with the  balance of the country at above-normal or normal temps. The 6-10 Day Outlook forecasts the Eastern 2/3 of the country at normal or below-normal temps, with the entire Western US at above-normal temps.

The 11-15 Day Outlook forecasts the Eastern Seaboard at normal temps, the Central states at normal temps with most of the rest of the country at above-normal temps. The 30 and 90-day Outlook projects the most of the country at normal temps with the South at above-normal temps.

Sustainability and Renewables

Scientists accidentally produce an enzyme that devours plastic. The mutant enzyme breaks down plastic in a matter of days.

There are research teams around the world dedicated to finding a remedy for the growing plastic pollution crisis, but now it seems that one group of scientists have found a feasible answer -- and they stumbled upon it by accident. Researchers studying a newly-discovered bacterium found that with a few tweaks, the bug can be turned into a mutant enzyme that starts eating plastic in a matter of days, compared to the centuries it takes for plastic to break down in the ocean.

This Week's KeyTakeaway

Now in our 3d week of the Injection Season, Natural Gas Underground Storage numbers continued to drop and prices have risen slightly while still trading in a narrow bandwidth.  The spot market for electricity prices continues to be relatively low but should drop further when Natural Gas flow reverses.

Today's withdrawal of 36Bcf and the colder-than-normal weather outlook for the Eastern half of the US means that prices for electricity and natural gas are not expected to drop over the next week. Additionally, it may be May before we see a net injection into Natural Gas Underground Storage.


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