New York — US working natural gas inventories rose by 75 Bcf last week while an approaching hurricane in the Gulf of Mexico douses LNG export demand in the South-Central storage region.
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US gas in storage increased 75 Bcf to reach 3.831 Tcf for the week ended Oct. 2, Energy Information Administration data showed Oct. 8.
The injection was above an S&P Global Platts' survey of analysts that called for a 71 Bcf build. Responses to the survey ranged from an injection of 62 Bcf to 86 Bcf. The injection measured less than the 102 Bcf build reported during the same week last year as well as the five-year average gain of 86, according to EIA data.
Storage volumes now stand 444 Bcf, or 13%, above the year-ago level of 3.285 Tcf and 394 Bcf, or 11.5%, above the five-year average of 3.351 Tcf.
Stock levels for the Continental US were 128 Bcf higher than the previous five-year maximum for this calendar week. Nearly half of those extra volumes were stored in the South-Central region's salt dome facilities, which are 58 Bcf higher than the five-year maximums.
NYMEX Henry Hub futures prices were muted the morning of Oct. 8, with November rising 1 cent to $2.62/MMBtu, while the balance of winter was trading about 1 cent lower. After a rocky month of trading, winter strip prices were roughly equal to where they were a month ago, with the strip priced at $3.09 after briefly dropping as low as $2.93 last weekend.
S&P Global Platts Analytics' supply and demand model currently forecasts a 37 Bcf injection for the week ending Oct. 9. This would lower the surplus to the five-year average by 50 Bcf.
Markets have tightened for the week ending Oct. 9, with the week in progress seeing fundamentals trending more than 4 Bcf/d tighter compared with the week prior. Total supplies week have averaged about 300 MMcf/d lower, after a nearly 1 Bcf/d combined drop in onshore and offshore production was supported, in part, by a 700 MMcf/d increase in net Canadian imports.
Downstream, residential and commercial demand has made a strong showing, up nearly 3 Bcf/d week on week, while LNG feedgas demand has ticked up another 700 MMcf/d, helping drive a combined 3.9 Bcf/d increase in total US demand.
Injections tightened in response to the rapid intensification of Hurricane Delta from a Tropical Storm to a Category 4 hurricane Oct. 6. Despite the calm start to the week, the South-Central region finishes as the primary driver of weaker US-level injections, with the salt domes alone accounting for nearly half of the week-on-week change.