Summit Pricing Report for September 6, 2016

View the full report here.

The latest storage report from the EIA reflected a 51 injection for the week of August 26, 2016 to 3,401 Bcf; greater than the 42 Bcf injection consensus, but below the 88 Bcf injection reported for the same week in 2015. The current storage total of 3,401 Bcf is 238 Bcf higher that at the same time in 2015 and 334 Bcf above the five-year average of 3,067 Bcf. After the storage release, prices for October 2016 came in at $2.807 per MMBtu, down 8.0 cents. The current NYMEX October 2016 price is at $2.732 per MMBtu (as of 11:00AM, MDT, 09/06/16).

WEEKLY UPDATES/MARKET PULSE:

  1. Rig activity: +8: The change in oil rigs was +1, Natural Gas was +7, Misc. was 0.
  2. Per Bloomberg: Commercial crude oil inventories are on the rise again, up 2.3 million barrels in the August 26 week to 525.9 million barrels, increasing the year -on-year gain to 15.5 percent. Petroleum product inventories were mixed, with gasoline down 0.7 million barrels to 232.0 million, up 8.3 percent from a year ago, while distillate fuel rose 1.5 million barrels to 154.8 million barrels, for a 3.2 percent yearly gain.

CONCLUSION: With the meteorological fall season that began on Sept. 1 already underway, moderating weather associated with the season looks to trim cooling demand ahead of any significant boost in heating load. National Weather Service outlooks for the six – to 10-day and eight- to 14-day periods show above-average temperatures spanning the bulk of the East, a few areas of the southcentral U.S. and parts of the Pacific, as below-average temperatures stretch over much of the Rockies into a large section of the central U.S. and average temperatures settle elsewhere in the country. Although above-average temperatures linger over major cooling markets in the eastern U.S., lower high temperatures implied by the arrival of fall look to keep a lid on cooling demand, which should allow for more natural gas to be added to storage. The 51-Bcf injection to stocks reported by the U.S. Energy Information Administration in its latest storage data for the week ended Aug. 26 already signaled an improvement over the paltry injections seen through the bulk of the refill season. It bested the average anticipated 42-Bcf injection, even as it was below the 67-Bcf five-year-average build and the 88-Bcf injection seen in the corresponding week in 2015. Sources: Bloomberg, ProphetX, Baker Hughes, NOAA

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