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US gas demand grows, supply stalls to start December

Total U.S. natural gas demand climbed amid stronger consumption across major sectors during the week ended Dec. 6, while overall supply held near steady, the U.S. Energy Information Administration said in its latest "Natural Gas Weekly Update" released Dec. 7.

Natural gas consumption in U.S. was 8% higher week on week, from 66.9 Bcf/d to 72.1 Bcf/d. Power burn logged a 12% increase versus the prior-week level as it rose from 20.8 Bcf/d to 23.2 Bcf/d, as industrial-sector demand posted a 1% uptick over the same period as it climbed from 21.4 Bcf/d to 21.5 Bcf/d and residential/commercial-sector consumption notched a 10% gain on the week as it widened from 24.8 Bcf/d to 27.3 Bcf/d.

Natural gas exports to Mexico deflated by 7% from the prior-week level, slipping from 4.4 Bcf/d to 4.1 Bcf/d. Natural gas pipeline flows to the Sabine Pass liquefaction terminal was unchanged week over week at an average of 3.0 Bcf/d, with four vessels carrying a combined 14.0 Bcf of LNG seen to have left the terminal from Nov. 30 to Dec. 6, and two tankers bearing a combined 6.9 Bcf of LNG seen loading at the terminal on Dec. 6.

U.S. natural gas supply averaged at 81.7 Bcf/d during the week in review, compared to 82.0 Bcf/d in the week ago. Dry production posted a 1% decline week on week as it slumped from 76.7 Bcf/d to 76.2 Bcf/d, while net imports from Canada notched a 4% gain over the same period as it grew from 5.1 Bcf/d to 5.3 Bcf/d.

In terms of inventories, the latest storage report from the EIA outlined a net 2-Bcf injection for the week ended Dec. 1 that took total working gas stocks to 3,695 Bcf, or 264 Bcf below the year-ago level and 36 Bcf below the five-year average of 3,731 Bcf.

Milder weather that drove down demand for natural gas, primarily in the residential/commercial sector, is seen to have allowed for the atypical storage build that defied the 69-Bcf five-year average withdrawal and the 43-Bcf pull seen in the corresponding week in 2016.

The storage report week marks the first time since Dec. 7, 2012, that natural gas inventories logged a net injection in December. Both instances occurred as net builds in the South Central region more than offset net drawdowns in the East and Midwest, the EIA said.