EIA reported a 67 Bcf net increase to natural gas inventories to 3,525 Bcf for the weekn ended September 18 which brings inventories to within 20 Bcf of record high inventory mark set in November 2007. Natural gas futures were down slightly on the news. At the 3,525 Bcf inventories are 509 Bcf higher compared to the same time last year, and 485 Bcf above the five-year average according to the EIA report.
As previously stated, for every week that net delivearies are above an average of 65Bcf, inventories will move closer to reaching maximum storage capacity around the end of October, early November. However, production cuts could impact delivary numbers as they come into effect from expiring hedge contracts. In other words, natural gas would need to see weekly net deliveries below 65 Bcf in order for prices to stabilize and subsequently appreciate.
