August 08, 2019 [S&P Platts Global] – Analysts expect US natural gas in storage to rise 57 Bcf for the reporting week ended Friday, which would be the second-smallest build reported since early April.
The US Energy Information Administration is expected to report the 57 Bcf injection for the week ended August 2, a survey of analysts by S&P Global Platts showed. Responses to the survey stayed in a narrow range from 54 Bcf to 65 Bcf. The EIA plans to release its weekly storage report at 10:30 am EDT Thursday.
A 57-Bcf injection would be more than the 46 Bcf build in the corresponding week last year, as well as the five-year average injection of 43 Bcf. An injection within expectations would increase stocks to 2.691 Tcf. The deficit versus the five-year average would shrink to 109 Bcf and the surplus to last year would expand to 345 Bcf.
The injection still looks to be less than the week prior, when the EIA reported a 65 Bcf build.
Supply, Demand
In August, US gas production has hit fresh highs, keeping the domestic market well supplied. Late last week, output surpassed the 90 Bcf/d milestone for the first time, followed by successive record highs culminating Monday at 90.5 Bcf/d, data from S&P Global Platts Analytics shows.
Recent supply strength has been coupled with weaker export demand, thanks to recent maintenance and commissioning activity at several US LNG export terminals.
On Monday, a spokesman for Cheniere Energy confirmed a weekend startup to maintenance on trains 3 and 4 at the company’s Sabine Pass terminal in Louisiana.
Feedgas flows to the facility have since declined sharply, averaging about 2.4 Bcf/d since Saturday, down from a prior 14-day average at 3.7 Bcf/d. Ongoing commission activity at Cheniere’s Corpus Christi terminal in Texas has also seen flows there decline by more than 550 MMcf/d since Saturday.
Total US feedgas demand was estimated at 4.3 Bcf/d Tuesday, down from recent highs at over 6 Bcf/d, Platts Analytics data shows.
Outlook
Strong power burn, which has averaged over 40 Bcf/d in this month should continue to support US domestic gas demand through the second week of August, current forecasts show. There are few other factors supporting demand in the market currently, though, according to Kent Berthoud, a storage analyst with Platts Analytics.
In addition to recent maintenance and commissioning-related demand setbacks, export demand from Mexico has continued to hover around 5.3 Bcf/d this month, well below prior expectations.
Indefinitely delayed startup of the Sur de Texas-Tuxpan pipeline, which is now the subject of arbitration proceedings between Mexico’s CFE and developers TC Energy and IEnova, could ultimately provide a new outlet for upwards of 1 Bcf/d of US supply.
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