Re storage, and today's injection of only 15BcfI’ve gone back 7 years (2010-2016) to get some perspective on the final winter top-ups
Yr. over yr. % difference 5 yr. avge. Comparison % difference
2010 .34 9.30
2011 .60 6.44
2012 2.85 6.62
2013 -2.04 1.54
2014 -5.74 -6.16
2015 16.03 6.71
2016 1.28 5.64
Of the 7, there were only 2 where there were deficits; 2013, -2.04% yr. over year and +1.54% versus the 5 yr. and 2014, -5.74% yr. over year and -6.16% versus the 5 yr. In isolation these figures don’t really mean much unless you can tie them into the cyclical nature of NG.
For instance, winter 2013-14 turned out to be the “winter from hell” and it sucked the brains right out of the stocks; in fact, demand for storage gas was so strong that at winter’s end, stocks were a trillion cf. below the previous yr. The industry then struggled unsuccessfully throughout 2014 to replace those stocks so that we started the winter season 2014-15 in a deficit, that amazingly, was even lower than 2013, (note the highlighted yellow above). Eventually drillers brought on production so that by the Nov 2015 winter top-up storage sat at +16.03% yr. over year and +6.71% over the 5 yr.; (this represented the biggest fill of the 7 years). Due to mild weather and enormous storage, the 2015-16 winter season was a bust as far as NG prices were concerned; however increased exports and a falling rig count in in the latter half of 2016, the winter top-up in Nov. rang in at +1.28% yr. over year and +5.64% versus the 5 yr. With supply/demand now more in balance it looked as if there would be a decent chance for higher NG prices; but once again an extremely mild winter 2016-17 put the kibosh to that and dashed producer’s hopes.
Persistently higher exports to Mexico and Sabine Pass LNG and restraint in the rig count numbers, sets up the 2017 winter top-up to come in at extremely favorable levels. It won’t match the 2014 numbers, but it will be the 2nd lowest in 8 years if you count 2017 in the group above.
Given the huge expansion of the North American NG market these last few years, possibly a colder winte and a diffrerent part of the cycle, -namely swinging into a deficit against a seasonal peak demand this winter compared to a production recovery period from 2014-16, it’s going to make things bloody interesting.