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Natural Gas Storage Report - Injection Season Results for Week 9 (Ending May 30, 2014)

Natural Gas Injection for Week 9, 2014

The 9th week of the Natural Gas Injection Season historically produces the highest injection levels of the season since it is the last week before summer heat sets in. Increased demand for electric generation then significantly reduces the  amount of gas going to storage facilities.

                                                                    Source: EMEX, LLC

                                                                    Source: EMEX, LLC

  • This week the storage report showed an injection of 119 Billion Cubic Feet (BCF) - above the market expectations of 115 BCF. This is the second highest injection number reported for Week 9 since 2008 (the highest was 124 BCF in 2009).  Storage is currently at 1,499 BCF. The market originally moved down on this bearish news, but has since recovered and is up;
  • More gas was injected in Weeks 6-9 of the injection season in 2014 than at any time in the past 6 years);
  • We are averaging roughly 10% above historical norms for the first 9 weeks of injection season.  If we continue on this trajectory, storage would be at 3,201 BCF at the end of injection season. This would be approx. 4% below the lowest storage levels that we have seen since 2008;
  • We will still need record injection numbers (88 BCF/week) to refill storage to the conservative levels expected by the Energy Information Administration and to get to the high of 2012, we would need to average 110 BCF week;
  • Bearish storage reports usually create downward market movement.  However, with the market basically flat on news that should push it down, we remain bullish on natural gas and electricity commodities. 
  • You may want to evaluate your natural gas and electricity needs, since prices are likely to be higher than previous contracted rates and we feel that a sustained downward market move is unlikely in the future. 

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