US natural gas storage declined less than expected
Total working US natural gas storage declined for the week ending March 12 and remains below the five-year working average, government data released March 18 show.
The US Energy Information Administration (EIA) reported that total working natural gas storage declined 11bn ft3 from the previous reporting week ending March 5.
US natural gas is stored in depleted oil and gas fields, as well as in salt caverns along the US Gulf Coast.
Total gas storage reported by the EIA is less than analysts had expected. A survey of analysts from S&P Global Platts from March 16 showed the market had anticipated a 17bn ft3 drain on storage levels.
Total gas storage in the US is 12.4% below year-ago levels and 5% below the five-year range.
Most of the decline came from the East Coast, which saw storage levels drop 6.3% from the week ending March 5 to 328bn ft3, data show. That’s down 20.8% from year-ago levels and 7.1% below the five-year average.
That adds to some of the bullish trends in the market brought on by a February cold snap that idled US refinery activity and shale oil and natural gas production. That was particularly the case for Texas, which saw a rare temperature trend below freezing.
The price for Henry Hub, the national benchmark, was down about 1% during mid-day trading in the US to about $2.50/mn Btu on March 18 after EIA data was released. That’s down considerably from the double-digit price from one month ago.
Natural gas recovery will be slow. The latest drilling productivity report from the EIA estimates that only two of the primary shale basins in the US, Haynesville and Permian, can expect increases in production next month.