US working gas storage volumes increased by 49 Bcf for the week ended Aug. 6, slightly more than what the market expected as the NYMEX Henry Hub winter strip declined following the announcement.
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The build brought the US storage total to 2.776 Tcf, the US Energy Information Administration reported Aug. 12.
The injection was more than the 44 Bcf addition expected by an S&P Global Platts' survey of analysts. Responses to the survey ranged from injections of 38 Bcf to 56 Bcf. The storage build was more than the five-year average build of 42 Bcf but less than the 55 Bcf injection in the corresponding week of last year. The Platts Analytics' supply and demand model proved closest at 47 Bcf. The analysts' survey has proved close to the mark over the past four weeks, missing the EIA estimate by an average of 4.5 Bcf.
US storage volumes now stand 548 Bcf, or 16.5%, less than the year-ago level of 3.324 Tcf and 178 Bcf, or 6%, below the five-year average of 2.954 Tcf.
The injection was much stronger than 13 Bcf added the week prior. Supplies were flat on the week with offsetting changes in production and imports from Canada, according to Platts Analytics. Downstream, however, total demand fell by 4.5 Bcf/d, driven mainly by a 4.3 Bcf/d decline in gas-fired power demand week on week.
US power burns tumbled more than 5 Bcf/d year on year in July, because of higher natural gas prices and milder weather. Population-weighted temperatures have come in roughly one degree below the 10-year normal, while prices have tracked $2/MMBtu higher this July versus last.
The NYMEX Henry Hub September contract slipped 14 cents to $3.91/MMBtu during trading Aug. 12. The winter strip, November through March, shed 16 cents to averaged $4.03/MMBtu, representing a net decline of 20 cents from one week prior. This kept the seasonal price spread flat at roughly 10 cents, which has been exceedingly small this summer to date. Spreads from this summer to next winter are now trading slightly above 10 cents/MMBtu, still not enough to clear storage cycling costs and prioritizing spot gas over future reliability in the event of a cold winter.
Platts Analytics' supply and demand model currently forecasts a 35 Bcf injection for the week ending Aug. 13, which would measure 7 Bcf less than the five-year average.
Fundamentals during the week in progress have seen a tightening compared with the previous week. Following recovery from last week's fall in gas-fired power generation, total demand increased by 1.2 Bcf/d on the week as power burn ramped back up. LNG export demand offset some of those gains, falling 700 MMcf/d compared with the week ended Aug. 6.