April 11, 2018 – Natural Gas Intelligence
Natural Gas Futures Higher Amid Estimates for April Storage Withdrawal
By Jeremiah Shelor
Natural gas futures nosed higher Wednesday ahead of a government storage report expected to show a withdrawal for the first week of the injection season thanks to lingering April cold. Spot prices tumbled in the East amid moderating temperatures and falling demand, while SoCal Citygate eased off recent gains; the NGI National Spot Gas Average dropped 17 cents to $2.51/MMBtu.
The May contract settled at $2.675 Wednesday, up 1.9 cents after trading as low as $2.621 and as high as $2.690. June added 1.5 cents to settle at $2.709.
Estimates for Thursday’s Energy Information Administration (EIA) storage report have been pointing to a withdrawal during the first week of April, bullish versus the year-ago and five-year average for a period that would have kicked off the injection season if not for below normal temperatures sticking around.
A Reuters survey of traders and analysts on average predicted a 14 Bcf withdrawal from Lower 48 gas stocks for the period ending April 6, with estimates ranging from 9 Bcf to 38 Bcf. A Bloomberg survey produced a median estimate for a 12 Bcf withdrawal, with a range of 7 Bcf to 18 Bcf. Last year 9 Bcf was injected, matching the five-year average for the period.
IAF Advisors analyst Kyle Cooper called for a withdrawal of 12 Bcf, while Intercontinental Exchange EIA storage futures settled Tuesday at a pull of 14 Bcf…
Read the full article here: http://www.naturalgasintel.com/articles/114004-natural-gas-futures-higher-amid-estimates-for-april-storage-withdrawal
…Further upstream in West Texas, El Paso Permian dropped another 4 cents to average $1.43 Wednesday after Tuesday’s low of 96 cents set a new mark for the cheapest trade NGI has ever recorded there going back to 1993.
Takeaway restrictions appeared to contribute to the low prices, as Genscape Inc. noted on Tuesday that El Paso Natural Gas would be performing testing Wednesday and Thursday on its Black River Station, limiting westbound flows on its L2000 line.
But the low at El Paso Permian comes during a period of depressed pricing throughout West Texas as rising production out of the Permian Basin competes for limited pipeline capacity.
“Permian Basin natural gas production is growing at a torrid pace,” RBN Energy LLC analyst Jason Ferguson said in a recent note. “After starting 2017 just below 6 Bcf/d, production is set to breach the 8 Bcf/d mark soon on its way to 10 Bcf/d by the end of 2019.
“Pipelines flowing out of the basin are coming under increasing strain, and just about every single gas pipeline leaving the Waha hub in West Texas is now being utilized at levels not witnessed in years -- if ever,” Ferguson said. “Even routes north from the Permian to the Midcontinent and Midwest markets, traditionally only attractive on the coldest winter days, are starting to look viable year-round.”
