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Cooldown trims US gas demand in week to Oct. 4

Cooler weather triggered a reduction in total U.S. natural gas demand during the week that ended Oct. 4, as overall supply held almost unchanged amid near steady production, the U.S. Energy Information Administration said in its latest "Natural Gas Weekly Update" released Oct. 5.

Total U.S. natural gas consumption was 14% lower week on week, easing from 61.4 Bcf/d to 52.7 Bcf/d. "Temperatures throughout most of the Lower 48 states averaged much lower over this report week as compared to last report week," according to the EIA.

Power burn notched a 24% decrease relative to the week-ago level as it fell from 33.9 Bcf/d to 25.7 Bcf/d, while residential/commercial-sector demand logged a 13% decline over the same period as it slid from 8.1 Bcf/d to 7.1 Bcf/d. Industrial-sector consumption posted a 2% gain on the week as it widened from 19.4 Bcf/d to 19.8 Bcf/d.

Natural gas exports to Mexico were reportedly up 1% week over week at an average at 4.2 Bcf/d. Natural gas pipeline flows to the Sabine Pass liquefaction terminal slumped from 2.2 Bcf/d to 2.0 Bcf/d over the same period, with three vessels carrying a combined 11.2 Bcf of LNG seen to have left the terminal from Sept. 28 to Oct. 4 and one vessel with an LNG-carrying capacity of 3.8 Bcf seen loading at the terminal Oct. 4.

Overall U.S. natural gas supply nudged lower from 80.0 Bcf/d in the prior week to 79.7 Bcf/d in the current review period. Dry production eased from 74.3 Bcf/d in the week ago to 73.9 Bcf/d in the current report week as net imports from Canada logged a 1% gain over the same period, growing from 5.7 Bcf/d to 5.8 Bcf/d.

In terms of inventories, the latest storage data from the EIA outlined a net 42-Bcf injection for the week that ended Sept. 29 that was a downside miss against both the 91-Bcf five-year-average build and a 76-Bcf addition seen in the corresponding week in 2016. Stronger power burn despite steady natural gas production likely contributed to a reduction in the pace of inventory-building relative to the prior week, according to the EIA.

Total working gas stocks currently sit at 3,508 Bcf, or 161 Bcf below the year-ago level and 8 Bcf below the five-year average of 3,516 Bcf, marking the first time inventories have fallen below the five-year average since Jan. 20.

Net storage injections thus far in the refill season have totaled 1,457 Bcf, or 16% lower than the five-year average of 1,730 Bcf.

A continuation of the slower-than-normal pace of storage rebuilding through the balance of the refill season would bring end-of-season inventories to 3,782 Bcf, the EIA estimated. However, injections at par with the five-year average would bring working gas stocks to a total of 3,834 Bcf at the close of the season.