Winter Gas Prices Responding to Low Storage Levels

Weekly storage injection volumes reported this summer have been below the 5 year average.  Current storage level is at 2,435 Bcf, about 25% below the five-year average.  Storage levels are projected to be below 3,300 Bcf at the end of the injection season on October 31st.  According to data from the EIA, this would be the lowest storage level going into the withdraw season in 15 years.   

The NYMEX winter strip (Dec-Feb) is finally reacting to the growing storage inventory deficit.  The posted average price for the winter strip on August 22nd was $3.13 per MMBtu.  This is an increase of 16.5 cents from the average posted price on August 1st of $2.96/MMBtu.  EIA expects natural gas spot prices to average $2.98/MMBtu for the remaining months in 2018 and $3.10/MMBtu in 2019.