Natural gas report week, August 4, 2022.
This week’s injection of 41 Bcf came in at the high end of analysts’ expectations which ranged from 19 Bcf to 44 Bcf. Comparatively, last year’s injection was 16 Bcf and the five-year average of net injections is 33 Bcf. Current storage totals 2,457 Bcf which is 12.1% below the five-year average but within the five-year historical range.
Overall, prices retreated from the prior week with some help from cooler temperatures, decreased demand, increased production, and a respectable storage injection. Looking ahead, continued high LNG demand, supply concerns, and summer heat will likely keep prevent downward price momentum.
Demand
Total demand dropped by 1.8 Bcf/d from last week as last week’s heat wave subsided, taking power generation demand with it. LNG export ships increased by four, totaling 22 on the week for an overall capacity of 81 Bcf, up 14 Bcf from last week.
Production
Production increased slightly, adding 0.9 Bcf/d. The natural gas rig count grew by 2 from last week, totaling 157 rigs. Oil-directed rigs increased by 6 to 605 rigs. In all, that’s 767 rigs, 279 more than this week last year.
Storage Forecast
The average rate of injections into storage is 5% lower than the five-year average at this point in refill season (which traditionally runs April through October). If the injection rate matches the five-year average of 9.0 Bcf/d through October 31, natural gas supply will total 3,308 Bcf, 337 Bcf lower than the five-year average of 3,645 Bcf.
September settled Thursday at $8.122/Dth down 14.4 cents from Wednesday’s close at $8.266/Dth and 1.2 cents from last week.
Settled Thursday at $6.657/Dth, down 3.1 cents from the prior week.
The balance of the summer strip settled at $8.118/Dth, down less than a penny from the week prior. The winter forward (NOV22-MAR23) settled Thursday at $7.868/Dth, down 2.7 cents from last week.
Calendar Years 2022/2023/2024
CY22 settled Thursday at $8.176/Dth, down 1.2 cents from the prior week.
CY23 settled Thursday at $5.613/Dth, down 4.3 cents from the prior week.
CY24 settled Thursday at $4.669/Dth, down less than a penny from the prior week.
Settled Thursday at $88.54/barrel, down $7.88 from the prior week.
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