US EIA looks to report smallest natural gas storage injection of season: survey
US natural gas storage fields likely registered the smallest net injection of the season last week as Henry Hub futures and spot prices across the US make small gains during a period of sustained and elevated demand.
The US Energy Information Administration is expected to report a 23 Bcf injection for the week ended July 24, according to an S&P Global Platts survey of analysts. Responses to the survey were tight and ranged from an injection of 15 Bcf to 33 Bcf. The EIA plans to release its weekly storage report at 10:30 am ET July 30.
A 23 Bcf injection would be less than the 56 Bcf addition in the corresponding week last year and the five-year average build of 33 Bcf. A build within those expectations would increase stocks to 3.238 Tcf. The surplus to the five-year average would slide to 426 Bcf, and the overhang to 2019 would contract to 623 Bcf. The injection looks to be less than the 37 Bcf build reported for the week prior.
The EIA is expected to announce an even more bullish injection, according to S&P Global Platts Analytics. US power burn estimates climbed nearly 2 Bcf/d for the week ended July 24, marking a new year to date high of 45.1 Bcf/d. The tighter week-on-week demand was partially offset by upward momentum from production in the Northeast, which pushed US production to the highest levels since May.
Despite the lower-than-expected utilization of LNG this summer, power burn has helped ease some of the overhang heading into the shoulder season. As global gas prices remain hamstrung by the ongoing coronavirus pandemic, LNG exports remain significantly underutilized. However, total feedgas deliveries moved in a positive direction last week, climbing 300 MMcf/d to average 3.6 Bcf/d.
The EIA’s South Central region posted a 7 Bcf net withdrawal for the week ended July 17, but an even larger net draw of 9 Bcf draw is expected in the July 30 announcement. The total US surplus relative to the five-year average started May at 21%, but it is forecast to stand at 15% as of July 24.
The NYMEX Henry Hub August contract added 6.6 cents to $1.80/MMBtu during afternoon trading July 28.
Platts Analytics’ supply-and-demand model currently expects an injection of 34 Bcf for the week ending July 31. This would increase the surplus to the five-year average by 1 Bcf with three months of injection season remaining.