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US natural gas demand tightens, supply flat in week to April 5

Weaker residential and commercial demand drove down total U.S. natural gas consumption during the week ended April 5, as overall supply remained flat amid steady production, the U.S. Energy Information Administration said in its latest "Natural Gas Weekly Update" released April 6.

Overall U.S. gas consumption slumped by 2% week over week, from 63.8 Bcf/d to 62.5 Bcf/d. Residential/commercial-sector demand logged an 11% drop relative the prior-week level as it fell from 21.1 Bcf/d to 18.7 Bcf/d, while power burn notched a 5% gain week on week as it climbed from 21.8 Bcf/d to 22.9 Bcf/d and industrial-sector consumption held unchanged over the same period at an average at 20.9 Bcf/d.

Exports to Mexico were up 3% versus the week-ago figure, from 3.8 Bcf/d to 3.9 Bcf/d. Natural gas pipeline flows to the Sabine Pass liquefaction terminal during the review period were 14% higher week on week at 2.1 Bcf/d, with five vessels of a combined LNG-carrying capacity of 17.5 Bcf seen to have left the terminal in the previous week and one vessel with an LNG-carrying capacity of 3.6 Bcf loading at the terminal on April 5.

Total U.S. gas supply was reportedly the same relative to the prior-week level at an average at 75.6 Bcf/d. Dry production held flat on the week at an average at 69.9 Bcf/d, as net imports from Canada posted a 2% uptick week over week to average at 5.6 Bcf/d.

In terms of inventories, the latest storage data from the EIA outlined a net 2-Bcf injection to stocks for the week to March 31 that compared to a 13-Bcf five-year-average drawdown and a 6-Bcf build seen in the corresponding week in 2016. Warmer weather during the final storage week of the heating season is seen to have allowed for the reported inventory build that took total working gas stocks to 2,051 Bcf, or 427 Bcf below the year-ago level and 265 Bcf above the five-year average of 1,786 Bcf.

Cumulatively, net withdrawals from storage through the duration of the heating season from Nov. 1, 2016, through March 31 reached 1,935 Bcf, which is 32% higher than last year's withdrawals of 1,468 Bcf.

Although total natural gas demand throughout the 2016/17 heating season was almost at par with the 2015/16 heating season, as the year-on-year reduction in power burn was roughly offset by increased U.S. exports, natural gas production across the contiguous U.S. during the same period averaged over 2 Bcf/d lower than in the prior year. With imports from Canada up only 0.2 Bcf/d versus year-ago level, most of the supply shortfall was met by withdrawing greater volumes of gas from storage, the EIA said.