North America gas markets short-term outlook March 2018: mounting storage deficit keeps prices elevated
The 93 bcf withdrawal last week was again demonstrative of a tighter than normal supply-demand balance, driven by a delayed supply growth and elevated power burns. Our end-of-season inventory estimate is 1,348 bcf, the lowest it has been since 2014. Consequently, we have revised up our summer strip, but power burns could strengthen in the wake of changing coal contracts, and the higher oil price could shifts production from dry-gas to liquids-rich sub-plays, resulting in more tempered production growth. Beyond injection season, the opening throttle on Northeast pipes unleashes supply that keeps the winter strip in check.