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US gas demand, supply extend lower in week to April 27


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US gas demand, supply extend lower in week to April 27

Naturalgas demand and supply in the United States continued to shrink during the weekended April 27, as varied weather combined with declining production, the U.S.Energy Information Administration said in its latest "" releasedApril 28.

TotalU.S. gas demand deflated by 1.7% week over week, as weather conditions continued to moderatein the West and thereby offset unseasonable cold in the Northeast and Midwest,according to the EIA.

Naturalgas consumption in the residential/commercial sector fell by 4.7% from theweek-ago level and industrial-sector demand slumped by 1.2% week on week, asexports to Mexico eased by 1.0% over the same period. Gains were limited to thepower sector, whose consumption of natural gas climbed by 0.9% from theprior-week level, as daily temperatures in portions of the Gulf Coast andSoutheast that approached 80 degrees Fahrenheit drove up regional coolingdemand, the EIA said.

OverallU.S. natural gas supply notched a 0.4% decline from the level seen in theprevious week that is largely attributed to a 0.3% week-on-week decrease in drynatural gas production.

Importsof natural gas from Canada contributed to the overall slump in supply as itfell by 2.4% week over week amid reductions in gas flows to every region butthe Midwest, while LNG sendout bucked the downtrend as it rose by 2.2% over thesame period but remained a minor contributor to total supply.

Interms of inventories, the latest storage data from the EIA outlined a net73-Bcf injection tostocks for the week to April 22 that took overall inventories to 2,557 Bcf, or870 Bcf above the year-ago level and 832 Bcf above the five-year average of1,725 Bcf. The reported addition to storage compared against a 52-Bcffive-year-average build and an 84-Bcf injection seen in the corresponding weekin 2015.

Cumulativenet storage injections thus far in the 2016 refill season total 77 Bcf, versusthe five-year-average build over the same period of 119 Bcf, the EIA said.

Natural gas production slumps

Drynatural gas production across the contiguous U.S. has pulled back from a highreached in February, according to the EIA. Average daily production in Marchstands at 1.5% below the level seen in February, and recent figures show thatthe decrease extended into April as average daily production from April 1through April 23 is seen to be 1.0% lower than in March and a full 2.5% lowerthan in February, the agency said.

AverageFebruary production this year was 2.3% higher than in 2015, while Marchproduction was up only 0.4% year on year and April production thus far has been1.0% lower over the same period.

Factorscited by the EIA for the downtrend in production include diminished prices,delays and cancellations of pipeline projects that would distribute shale gasoutput, a record-low rig count, reduced capital expenditures of many naturalgas companies and a warm winter weather that allowed for gas inventories toreach record-high levels at the end of the heating season.

TheEIA, in its April "DrillingProductivity Report," sees March-to-May decreases in gasproduction in six of the seven key shale regions across the contiguous U.S.