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This week, let’s take a closer look at the Weekly EIA Gas Storage Report. According to the latest data from the EIA, U.S. working gas storage has reached a significant milestone, standing at 2,425 billion cubic feet as of April 19, 2024. With a net increase of 92 Bcf over the previous week, current stocks are 439 Bcf higher than last year and 655 Bcf above the five-year average. These numbers indicate that the total working gas has surpassed the historical range, reflecting unprecedented storage levels that could have implications for the market moving forward.
In addition to the gas storage report, we are also keeping a close eye on the impact of the recent Freeport LNG Outage. Operational disruptions at the Freeport LNG Development LP have caused some challenges in the natural gas market, with the facility reporting another outage at its third train. However, there are signs of potential normalization of operations, as a tanker recently departed from Freeport’s Texas terminal.
When it comes to demand and supply factors, LSEG forecasts show a decrease in gas demand in the Lower 48 states, while gas production has also dropped. Despite strong power burn and robust demand driven by low prices, the supply side is struggling to keep pace, leading to potential market volatility in the near future.
As we look ahead to the market forecast, it’s important to note that the May natural gas contract expiration is approaching. Market conditions remain volatile, with prices fluctuating between $1.60 and $2.00 per million British thermal units. Factors such as warmer weather reducing heating demand and the extended outage at Freeport LNG are putting pressure on prices, leading to a bearish outlook in the short term.
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