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US gas demand falters, supply remains constant to end May

Natural gas demand in the United States was weaker amid reduced consumption across most major sectors during the week ended May 31, while total supply was flat as rising production offset declining imports, the U.S. Energy Information Administration said in its latest "Natural Gas Weekly Update" released June 1.

Total U.S. gas consumption deflated by 5% week over week, from 56.5 Bcf/d to 53.5 Bcf/d. It compared to the prior-year level of 57.6 Bcf/d.

With moderate weather in portions of the country keeping a lid on cooling demand, power burn averaged 24.0 Bcf/d during the week in review, down 6% versus the prior-week level of 25.7 Bcf/d and off 19% relative to the year-ago figure of 29.7 Bcf/d.

Industrial-sector demand that averaged 19.9 Bcf/d on the week was 1% lower than the week-ago level of 20.0 Bcf/d but up from the prior-year figure of 19.7 Bcf/d. Residential/commercial-sector consumption during the report period averaged 9.6 Bcf/d, or 11% weaker than the prior-week level of 10.8 Bcf/d but 16% higher than the year-ago figure of 8.2 Bcf/d.

Natural gas exports to Mexico notched a 6% decline week on week as it faltered from 4.2 Bcf/d to 4.0 Bcf/d. Natural gas pipeline flows to the Sabine Pass liquefaction terminal averaged 1.6 Bcf/d during the week in review, with four vessels carrying a combined 14.4 Bcf of LNG having left the terminal from May 25-31.

Exports from Sabine Pass set a new monthly record in May, when a total of 18 cargoes, with a cumulative capacity of approximately 61 Bcf, were exported from the terminal.

Overall U.S. gas supply averaged at 76.8 Bcf/d during the report period, almost unchanged from the prior-week level but lower than the year-ago figure of 77.6 Bcf/d. Dry production logged a 1% gain week over week as it grew from 70.9 Bcf/d to 71.3 Bcf/d, while net imports from Canada notched a 3% decline over the same period as it fell from 5.7 Bcf/d to 5.5 Bcf/d.

In terms of inventories, the latest storage data from the EIA outlined a net 81-Bcf injection for the week ended May 26 that was lower than the 97-Bcf five-year average injection but slightly higher than the 80-Bcf addition seen in the corresponding week in 2016. The figure included a reclassification of 4 Bcf from working gas to base gas in the Mountain region, resulting in an implied flow of 85 Bcf for the week in review.

Total working gas stocks currently sit at 2,525 Bcf, or 370 Bcf below the year-ago level and 225 Bcf above the five-year average of 2,300 Bcf.