Investigation calls for another below-par U.S. natural gas storage construction
Shares to rise 63 billion cubic feet for the week ended June 18
The deficit until 2020 is expected to exceed 500 billion cubic feet
Analysts expect another below-average injection of natural gas into U.S. storage fields for the week ended June 18, as several regions approach mid-season with large deficits by historical standards .
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The US Energy Information Administration is expected to report an injection of 63 Bcf for the week ended June 18, according to an analyst survey by S&P Global Platts. Responses to the survey were narrow, ranging from an injection of 59 to 71 Bcf. The EIA plans to release its weekly storage report on June 24 at 10:30 a.m.
An injection of 63 Gcf would be lower than the five-year average construction of 83 Gcf in the corresponding week. This would bring stocks to 2,490 billion cubic feet Tcf. U.S. storage would measure 146 billion cubic feet below the five-year average, and the deficit through 2020 would extend to 505 billion cubic feet.
The injection would represent nearly half of the 115 Bcf injection reported for the same week in 2020. This shows how tight the market has been by then, as production continues to disappoint while demand export and electricity consumption show no signs of slowing down. down, even despite a higher price range for the summer sale which almost doubled from a year ago.
The NYMEX Henry Hub July contract added 7 cents to $ 3.26 / MMBtu when trading on June 22. The rest of the summer, July through October, added 5.5 cents to $ 3.26, which was only about 12 cents less than the upcoming winter band from November through March. .
The week ended June 18 saw a massive reshuffle in supply and demand between the various regions of the EIA, driven by increased demand for power generation in the south-central and central regions of the west as well as a sharp drop in demand in the east.
Virtually the entire length of the offering focused on the Eastern and Midwestern regions alone, while the South Central, Highlands, and Pacific regions each ended up with single-digit stacked storage builds, indicating tight, albeit nearly balanced, markets in these areas, according to EIA data.
The Eastern region saw the largest week-over-week increase in volumes injected into storage, as S&P Global Platts Analytics estimates inventory increased by 25 billion cubic feet during the week, or 9 billion cubic feet more than the previous week. However, this was offset by similar declines in the South Central and Pacific regions, where inventories are expected to have increased 9 Bcf less each from the previous week.
Despite the demand for LNG feed gas along the Gulf Coast, which was said to have been linked to scheduled but unannounced liquefaction maintenances, markets remained particularly tight in the center-south as temperatures rose there, increasing the demand for electricity.
Platts Analytics’ supply and demand model predicts an injection of 67 Bcf, for the week ending June 27, which would correspond to the five-year average build of 65 Bcf.