The Platts pre-report analyst survey suggests U.S. EIA data will show a 115 to 120 Bcf build to natural gas stocks

Washington - June 3, 2009

The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 115 and 120 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended Friday, May 29, according to a Platts survey of analysts.

An injection within expectations would be larger than both last year's 102-Bcf injection and the five-year-average build of 94 Bcf, according to EIA. As a result, the surplus to this week last year and the five-year average -- at a respective 524 Bcf and 393 Bcf as of May 29 -- each is expected to expand.

The broader range of analyst expectations spanned from a build between 103 Bcf and 128 Bcf. EIA estimated a 106-Bcf net injection to stocks for the week ended May 22.

Kent Bayazitoglu, director of market analytics with Gelber & Associates, said the U.S. Memorial Day holiday last week likely freed up between 10 Bcf and 20 Bcf of extra gas. "The holiday in combination with mild weather will most likely produce the biggest injection of the year," he said.

FirstEnergy Capital analyst Martin King said that natural gas price volatility has been "extreme" over the past few weeks, with factors outside of traditional gas fundamentals -- namely, higher petroleum pricing, positive equity performance and macroeconomic data -- trumping hefty storage inventories.

"We believe the market has essentially put in a low near $3.25[/MMBtu] and that this will mark the low for the remainder of the spring and summer," King said. "Early fall, as the market enters what could be a very full storage situation in late September and October, may mark another test and potential break below this price."

For more information on natural gas, visit the Platts website.