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Analysts forecast US natural gas in storage to rise 57 Bcf: survey

Analysts expect US natural gas in storage to rise 57 Bcf for the reporting week ended Friday, making for an average build despite record-high gas production this month.

The US Energy Information Administration is expected to report the 57 Bcf injection for the week ended August 23, a survey of analysts by S&P Global Platts showed.

Responses to the survey remained in a narrow range from 53 Bcf to 60 Bcf. The EIA plans to release its weekly storage report at 10:30 am EDT Thursday.

A 57-Bcf injection would be less than the 66-Bcf build in the corresponding week last year, and exactly aligned with the five-year average injection.

An injection within expectations would increase stocks to 2.854 trillion cubic feet (Tcf). The deficit versus the five-year average would remain unchanged at 103 Bcf, while the surplus to last year would narrow, falling to 360 Bcf.

The build looks to be slightly less than the week prior, when the EIA reported a 59 Bcf build.

In August, US gas production has hit fresh highs, keeping the domestic market well supplied.

Month to date, dry production has averaged 90.5 Bcf/d, its highest monthly average on record, according to data compiled by S&P Global Platts Analytics.

“Even as US production continues to set new records, storage injections have begun to waver,” said Kent Berthoud, a storage analyst with Platts Analytics.

“Recent gains in LNG feedgas demand have knocked injections back into five-year average territory, supporting prices at Henry Hub.”

Over the past week, maintenance- and commissioning-related declines in feedgas demand seen earlier this month at Cheniere Energy’s Sabine Pass and Corpus Christi terminals appear to have eased.

Along with smaller gains in feedgas consumption at Cameron LNG and Freeport LNG, demand from US liquefaction terminals has climbed sharply to about 6.4 Bcf/d over the past seven days, up from an average 4.4 Bcf/d during the first two weeks of August, Platts Analytics data shows.

Along with record consumption from the US power sector, which has averaged 40.5 Bcf/d in August, recent strength in domestic and export demand has trimmed storage injections and lifted benchmark US gas prices into the low $2.20s/MMBtu.

Moving into September, a seasonal shift to autumn should see power burn demand fall sharply, potentially adding more supply to the US market.

According to Platts Analytics, weather-normal demand in September would average only 33.7 Bcf/d, or about 6.8 Bcf/d lower compared with the August-to-date average.

On Monday, though, news from pipeline developer IEnova offered more optimism for an imminent startup to the Sur de Texas-Tuxpan project — a new cross-border pipeline that could quickly boost US exports to Mexico by upwards of 1 Bcf/d.

In a material event filing, IEnova confirmed earlier reports that recent contractual disputes between state-owned power generator CFE and pipeline developers have been resolved.

With mechanical completion of the 2.6 Bcf/d pipeline achieved in mid-June, operations on the new export route could begin imminently.
Source: Platts

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