Storage Report
The EIA Weekly Natural Gas Storage Report, released November 5 for the week ending October 30, estimated Lower 48 working gas at 3,801 Bcf. Stocks increased by 77 Bcf during the week. Inventories were 109 Bcf, or 2.8%, below the year-earlier level of 3,910 Bcf, but 55 Bcf, or 1.4%, above the five-year average of 3,747 Bcf. The EIA classified the inventory situation in the United States as within the five-year historical range.
The regional breakdown demonstrates why the national total itself does not give the complete picture. The East added 13 Bcf to reach 926 Bcf, while the Midwest added 23 Bcf to reach 1,111 Bcf. The Mountain region increased by 2 Bcf to 260 Bcf. Pacific inventories declined by 1 Bcf to a reading of 296 Bcf. South Central accounted for 40 Bcf of the national injection, bringing regional working gas to 1,208 Bcf. Salt facilities added 22 Bcf and non-salt facilities added 18 Bcf. Despite the large weekly build, South Central inventories remain both below their year-earlier level and their five-year average at the moment.
The 77 Bcf injection is an EIA estimate for a completed storage week rather than a forecast of supply or demand. It shows the system continued to build inventories at the end of October, but does not reveal production, LNG feed gas, or power-sector demand today. The central question is going to be how quickly injections give way to withdrawals. A late transition would leave inventories comfortable relative to the norm. An abrupt early cold spell could quickly reduce the 54 Bcf surplus to the five-year average, particularly because stocks already trailed the previous year.
NOAA Weather Guidance
Official weather guidance currently presents a divided risk scenario. NOAA’s Climate Prediction Center discussion from yesterday assigned elevated probabilities of above-normal temperatures across much of the country, from the Pacific region through the lower Mississippi Valley and western Great Lakes, during November 14 through November 18. The strongest warm probabilities were centered on the Northern Plains.
CPC indicated near- to below-normal temperatures in parts of the eastern United States. For November 16 through 22, it favored above-normal temperatures east of the Rockies, especially in the north-central states, while the West leaned closer to normal or perhaps even slightly below. These are probabilistic outlooks rather than measured temperatures and therefore should just be thought of as one piece of the puzzle. Broad warmth would ordinarily restrain heating consumption and delay withdrawals, but eastern cold can matter disproportionately because of the population density and pipeline constraints in places like New York City, Boston, and Washington, D.C.
The Next Storage Figures
The next storage report is scheduled for Friday, November 13, and will cover the week ending November 6. It should provide the first official test of whether late-season injection pace persisted. Other catalysts could include regional forecast revisions, LNG terminal operations, and pipeline notices from operators. Suitable current official figures for dry gas production, LNG feed gas, and timestamped Monday Henry Hub quotes are not available until we get our information on Friday.
From the technical analysis standpoint, it looks like traders are in fact starting to price in the idea of colder weather. The demand picture should start to shift here pretty soon, and it looks like the winter push is starting to become prevalent. Short-term pullbacks at this point in time look as if they are buying opportunities, as far as I can see. The $3 level should, at least in theory, offer some support.
