Last winter’s unusually harsh weather drew down natural gas storage inventories well below five-year average levels and left the industry assessing the degree to which producers would replenish inventories ahead of heating demand season. With summer drawing to a close and roughly 12 weeks of injections remaining before estimated peak storage, analysts are predicting where that peak storage volume is likely to land before withdrawal season kicks off in November.

“The EIA reported this morning that natural gas in storage increased 88 Bcf in the week ended August 15 to 2.555 Tcf. While summer injections continue to outpace historical trends, we remain 544 Bcf under-supplied, relative to the prior five-year average, as September looms. While tail risk of a massive under-supply heading into winter has been removed, we still believe inventories are likely to enter the drawdown period in November at/below 3.5 Tcf, which makes the natural gas market susceptible to price shocks if we see another severe winter.” – Sterne Agee analysts Tim Rezvan and Truman Hobbs