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Physical Gas Balance Is Far Tighter Than It Meets The Eye
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Physical Gas Balance Is Far Tighter Than It Meets The Eye

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HFI Research
Aug 24, 2023
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Physical Gas Balance Is Far Tighter Than It Meets The Eye
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Holy moly. EIA reported an +18 Bcf injection, which is not only the lowest injection so far this season, but it is also materially lower than our estimate (+39 Bcf) and the consensus average (+30 Bcf).

While this is only one week's data, it is important to note that if this trend continues, then the only conclusion we can reach is that something is not being captured in the data (lower than expected supply, or higher than expected demand).

Looking at our implied gas balances, we now see a deficit of -1.49 Bcf/d.

We have revised down EOS to 3.85 Tcf. Again, while we don't expect another major storage surprise to the downside, it is important to note that if next week's injection comes in well below our estimate again, we will need to re-calibrate our supply & demand figures.

This week's EIA storage report was also meaningful on another front.

This was the 5th largest South Central gas storage draw for the summer and next week's draw will be equally large. In essence, we could see the storage surplus that has plagued the market for much of this year turn into a deficit.

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