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US gas demand flounders, supply posts modest gain to end January

Natural gas demand in the U.S. faltered during the week ended Jan. 31, while supply edged higher, the U.S. Energy Information Administration said in its latest "Natural Gas Weekly Update" released Feb. 1.

Total U.S. gas consumption was 2% lower week on week, from 83.6 Bcf/d to 81.9 Bcf/d. Power burn notched an 8% decline versus the prior-week level as it fell from 23.2 Bcf/d to 21.4 Bcf/d and industrial-sector demand logged a 1% slump week over week as it slipped from 22.8 Bcf/d to 22.7 Bcf/d, while residential/commercial-sector consumption reflected marginal change as the average moved from 37.6 Bcf/d to 37.8 Bcf/d over the same period.

Natural gas exports to Mexico climbed by 3% from the week-ago level, rising from 4.3 Bcf/d to 4.4 Bcf/d. Natural gas pipeline flows to the Sabine Pass liquefaction terminal surged by 62% week on week, from 2.0 Bcf/d to 3.2 Bcf/d, primarily due to a resumption of normal operations following an unexpected shutdown of several trains in mid-January reportedly prompted by water supply problems. Natural gas feedstock to Sabine Pass averaged 2.6 Bcf/d in January, the EIA said.

Five vessels carrying a combined 18.4 Bcf of LNG were seen to have left Sabine Pass during the week in review, and two tankers with a combined LNG-carrying capacity of 7.6 Bcf were seen loading at the terminal on Jan. 31.

Meanwhile, two LNG cargoes from Nigeria and Trinidad were reportedly delivered to the Cove Point LNG facility in Maryland in December 2017 and January, with the first cargo said to have been sold to the mid-Atlantic market in a period of peak winter demand and the second cargo likely to be used for cool-down in the liquefaction commissioning process to test the terminal's systems. Cove Point announced Jan. 31 that it has begun producing LNG, with the first exports slated in early March.

Overall U.S. gas supply was up 1% week over week, from 83.0 Bcf/d to 83.5 Bcf/d. Dry production posted a 1% gain compared to the week-ago figure as it rose from 76.7 Bcf/d to 77.5 Bcf/d, while net imports from Canada notched a 2% decline on the week as it tightened from 6.0 Bcf/d to 5.9 Bcf/d.

In terms of inventories, the latest storage data from the EIA outlined a net 99-Bcf withdrawal during the week ended Jan. 26 that took total working gas stocks to 2,197 Bcf, or 526 Bcf below the year-ago level and 425 Bcf below the five-year average of 2,622 Bcf. It compared to a 92-Bcf year-ago draw and the 160-Bcf five-year average pull.