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Thursday Morning Report: EIA Expected To Report Season’s First Net Injection Today; Natural Gas Hits 1-Month High, Up For Fifth Day In Six

April 10, 2014

Apologies again for the spotty updates over the past week. I’ve been out of the country with limited connectivity until yesterday. Expect updates to resume from here on out.

The EIA will release its weekly natural gas storage report for the week of March 29-April 4 at 10:30am EDT today. My model is projecting a +15 BCF injection—the first of the season—that is 6 BCF greater than the five-year mean injection of +9 BCF a...[Click To Read Full Report]

Natural Gas Storage Projections

Gas Storage Main Page



Intraday Natural Gas Storage Information: Click For Further Details


An initial daily storage projection is made at Midnight of the current storage day based on forecast temperatures and early-cycle pipeline flow forecasts for that day. Estimated observed storage is updated hourly throughout the day based on actual temperatures and later-cycle pipeline data.



Natural Gas Pipeline Flows: Click For Further Details


Pipelines transport natural gas from primary producing areas along the Gulf Coast, Rockies & West Texas, and the Marcellus Shale of the Appalachians to major markets in the Northeast, Midwest and West Coast. Both daily deliveries and storage injections/withdrawals along 14 of the largest pipeline networks are presented here and updated daily, 7-days per week at between 5am EDT and 7am EDT.



Nuclear Generation, Outages & Natural Gas Substitution: Click For Further Details


When nuclear reactors--which provide nearly 20% of US electrical power--are shut down for refueling and scheduled or unscheduled maintenance, natural gas must be consumed to meet the lost capacity. A general rule of thumb is that for every 2000 megawatts that goes offline, 500 mmcf of natural gas per day must be burned to generate the same quantity of electrical power, which can significantly affect storage levels when nuclear outage levels fall outside of historical averages. Nuclear outages are updated daily Monday-Friday at between 5am EDT and 7am EDT.



Natural Gas Prices & Investing: Click For Further Details


The Fair Price Model is a simple calculation that estimates a “neutral” or “equilibrium” price for natural gas by comparing current natural gas in storage to storage levels—a proxy for supply and demand--and prices over the past 24 months. If natural gas is trading above this “Fair Price” value, the commodity is said to be overvalued and downside risk tends to outweigh upside potential whereas if natural gas is trading below this value, natural gas is said to be undervalued and the opposite is true. Visit the Fair Price Page for complete details.




Natural Gas Storage & Projections: Click For Further Details

The EIA releases its weekly natural gas storage report each Thursday at 10:30am EDT. The report provides a weekly barometer of natural gas supply and demand levels and is one of the major driving forces of volatility in the natural gas market. The projection model on this site integrates temperature forecasts published pipeline flow data, and other variables including nuclear generator outages and short-term supply disruptions in order to project the next five storage reports. Projections are updated twice daily at 7am EDT and 8pm EDT. Click above for current storage and 5-week projection graphics.



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Thursday Morning Report: EIA Expected To Report Season’s First Net Injection Today; Natural Gas Hits 1-Month High, Up For Fifth Day In Six

April 10, 2014

Apologies again for the spotty updates over the past week. I’ve been out of the country with limited connectivity until yesterday. Expect updates to resume from here on out.

The EIA will release its weekly natural gas storage report for the week of March 29-April 4 at 10:30am EDT today. My model is projecting a +15 BCF injection—the first of the season—that is 6 BCF greater than the five-year mean injection of +9 BCF and 29 BCF greater than last year’s -14 BCF withdrawal. This falls within the range of analysts polled by Platts, which is calling for a +13 BCF to +17 BCF build. Note: When available, today’s EIA report can be viewed in my Natural Gas Storage section HERE or on the EIA site HERE

Natural gas gained for the third consecutive day and fifth time in the last six sessions yesterday, finishing the day up 1.2% at $4.59/MMBTU. The close is the highest since the second week of March. The rally can most likely be attributed to forecasts of generally cool temperatures for the second half of April and investors acknowledging the severe storage deficit and slow start to the injections season. This being said, with forecasts looking somewhat less impressive over the last 24 hours, I expect it will take a bullish report to support the 7% rally we’ve enjoyed over the last six trading sessions. To date, higher gas prices have not been notably impacting the supply/demand picture in a negative way and as long as storage numbers continue to come in near historical averages and within analyst expectations, natural gas will find support. Today, I expect that a reported injection of less than 10 BCF will be considered bullish with prices likely to gain a fourth consecutive day. I expect a reported injection of 11 BCF to 15 BCF to be viewed as neutral with prices equally likely to rally or pull back. Finally, I expect a reported injection of greater than 15 BCF to be viewed as bearish with prices likely to give back some of the past week’s gains. Should natural gas break out today above $4.70/MMBTU, I will plan to initiate a small short position in DGAZ.

Warm temperatures continue to dominate much of the nation today, with readings of 5-15 degrees above-average across most of the nation today, with the exceptions of the Pacific Northwest and eastern Gulf Coast. Parts of central Texas and Arizona will even see some early-season cooling demand with readings reaching well into the 90s. Elsewhere, expect 60 degree readings to the Canadian border across the Plains and Rockies and as far north as NYC and Boston across the Northeast. Early-cycle pipeline flows continue to trend lower with total deliveries down 1.5 BCF to just 44.4 BCF today, a new 60-day low. 9 of 12 pipelines are now reporting daily injections, with the only holdouts being the TETCO, WBI, and Northern pipelines. My daily storage model is projecting a +11 BCF injection today, up 4 BCF from yesterday and 6 BCF greater than the five-year mean injection of 6 BCF/day.



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Disclaimer: Natural Gas Storage Projections, Intraday Natural Gas Stats, Morning Reports, and fundamental pricing models are released by Powerburn as experimental products. While they are intended to provide accurate, up-to-date data, they should not be used alone in making investment decisions, or decisions of any kind. Powerburn does not make an express or implied warranty of any kind regarding the data information including, without limitation, any warranty of merchantability or fitness for a particular purpose or use.