US working natural gas volumes in underground storage rise 43 Bcf: EIA

Denver — US natural gas stocks increased by less than the five-year average last week as below-normal temperatures boosted demand despite widespread stay-at-home measures.

Inventories of natural gas in underground US storage facilities increased 43 Bcf to 2.097 Tcf in the week that ended April 17, the US Energy Information Administration reported Thursday.

The injection was smaller than the consensus expectations of analysts surveyed by S&P Global Platts, who called for a 49 Bcf build. The injection was less than half the 92 Bcf build reported during the same week in 2019 and slightly smaller than the five-year average build of 49 Bcf.

The injection was substantially smaller than the 73 Bcf build reported for the week prior.

After seven consecutive weeks of warmer-than-normal temperatures, the US-wide average dropped to 52 degrees Fahrenheit from 58 F, and was 5 degrees below the 10-year average. As a result of the additional heating demand, modeled estimates for residential and commercial demand increased 5.4 Bcf/d week over week, according to S&P Global Platts Analytics.

Total demand was up by 5% from the week before, rising 4.7 Bcf/d to average 90.3 Bcf/d, as temperatures across the central and eastern US fell sharply. While widespread social distancing and non-essential business closures may have changed a lot about daily life in the US, they have yet to slice into natural gas demand.

Storage volumes stood at 827 Bcf at the end of the most recent reporting week, or 63% above the year-ago level of 1.313 Tcf, and 364 Bcf, or 20.5%, higher than the five-year average of 1.776 Tcf, according to EIA data.

The NYMEX May gas futures contract slipped 3.7 cents to $1.902/MMBtu in trading following the release of the weekly storage report.

The balance-of-summer Henry Hub contract strip slipped about 3 cents during Thursday trading. The decline does little to detract from the recent gains achieved over the past week. Wednesday's summer-strip settlement of $2.22 marked a nearly 30 cent gain from a week earlier, as expectations for sharp declines in associated gas production overwhelm the likely bearish effects of lost demand due to the coronavirus.

Platts Analytics' supply and demand model currently expects a 65 Bcf build in US storage volumes in the week ending Friday, which would slightly reduce the surplus to the five-year average.

The effects of colder weather have unraveled during the week in progress. Widespread warmer weather has driven total US demand down by 5 Bcf/d. Much of the declines stem from reduced home heating loads in the Midwest, Mountain and Pacific regions.

Click here for full-size image