It’s been a couple of weeks since we’ve looked at natural gas balances. Since today is EIA Natgas Storage day it seems appropriate to check in on the progress natural gas producers are making to cut back supplies. For readers not familiar with the quirks and foibles of the natural gas market, Thursdays are big days for gas traders. On Thursday mornings at exactly 10:30AM central time the EIA posts weekly natural gas storage inventories. Like other petroleum inventory numbers, these are not forecasts. They are EIA’s best guess at inventories at the end of last week. If you are interested, here’s the URL: http://ir.eia.gov/ngs/ngs.html.
Gas people hang on these numbers. I mean that in all senses of the phrase. In the oversupply situation that we are in, if EIA’s injection (fill) number comes in above market expectations, that is bad and prices most likely will fall. If lower, price has the opposite reaction. As you might expect, there is inordinate amount of analytical horsepower applied to the science and/or voodoo of predicting these numbers.
Energy Metro Desk, one of our favorite publications, pulls together the weekly estimates of 15 or so of the highest profile forecasters. Oops, I mean back-casters, since these are predictions of last week’s inventories. Here’s the poll: 40; 47; 38; 51; 47; 65; 43; 45; 65; 50; 37; 56; 74; 50; 75. To quote the weekly Metro Desk blurb - this distribution is “Crazy Wide”. Translated for the layman, that means that the experts are far apart about a historical number that will be known in a few hours. What does that mean for the industry’s ability to project where natural gas inventories will be in September - when storage capacity may be maxed out? I think you know the answer to that question.
Fortunately there is another set of numbers that are available to understand natural gas market trends, and that is the Bentek Supply/Demand table. We’ve looked at this table a couple of times in the past – most recently in The Wall. We’ve added a couple of hundred new RBN members since then, so I’ll repeat an explanation of the table here -
Bentek produces this tabular representation of the U.S. supply/demand balance each day based on daily receipts and deliveries scheduled at thousands of pipeline meter locations around the country. Bentek aggregates this data in such a way to assess the overall supply/demand picture (and thus storage balances). The table shown here is a subset of the Bentek report that they provide periodically to a few companies that cover natural gas markets. Thanks to Bentek for including RBN on the distribution.
There are two sections of the table. On the left we have current month-to-date average volumes, comparing April 2012 with April 2011. On the right, Year-to-Date (YTD) volumes comparing 2012 with 2011.
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