US gas storage facilities forecast to add 44 Bcf for week ended Aug. 6: survey

US natural gas storage fields likely added volumes roughly in line with the five-year average the week ended Aug. 6, but smaller builds loomed as the injection season neared its final two months and Henry Hub futures remained well above $4/MMBtu through the February 2022 contract.

The US Energy Information Administration is expected to report a 44 Bcf injection for the week ended Aug. 6, according to a survey of analysts by S&P Global Platts. Responses to the survey ranged from a 38 to 56 Bcf injection. The EIA plans to release its weekly storage report on Aug. 12 at 10:30 am ET.

A 44 Bcf injection would measure slightly more than the five-year average build of 42 Bcf but below the year-ago 55 Bcf addition during the corresponding week. It would expand stocks to 2.771 Tcf. US storage volumes would be 183 Bcf below the five-year average, and the deficit to 2020 would expand to 553 Bcf.

It would prove much more than the 13 Bcf injection posted for the week ended July 30.

The week ended Aug. 6 saw a loosening in US supply and demand balances after several weeks of tightening, with demand declining almost across the board.

In particular, demand fell in the Southeast region by roughly 2 Bcf/d, followed closely by the US Northeast where demand was down roughly 1.6 Bcf/d, according to S&P Global Platts Analytics.

The decline in Southeast demand and the freeing up of supplies in the Northeast coincided with an announcement by Texas Eastern Transmission that its 30-inch system capacity reductions, which had been in place since early June, were being lifted several months ahead of schedule. This allowed for more gas to move into the South Central storage region and dramatically halt the rate of storage withdrawals week over week.

After the South Central region posted a 23 Bcf draw for the week ended July 30, Platts Analytics expects a 1 Bcf withdrawal for the week ended Aug. 6.

The NYMEX Henry Hub September contract added 1 cent during the trade day on Aug. 3 to $4.07/MMBtu. The upcoming winter strip, November through March, fell 1 cent to $4.17/MMBtu, which was 7 cents higher than one week prior as futures continued to strengthen this injection season.

Platts Analytics' supply and demand model expects a 38 Bcf injection for the week ending Aug. 13, which would be 4 Bcf less than the five-year average.