The Platts pre-report analyst survey suggests U.S. EIA data will show an 106 to 111 Bcf build to natural gas stocks for the latest reporting week Washington - June 10, 2009 The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 106 and 111 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended Friday, June 5, according to a Platts survey of analysts. An injection within expectations would be the fourth consecutive week of a triple-digit build and would be larger than both the 84-Bcf year-ago and 91-Bcf five-year-average injection. As a result, the year-over-year surplus--which totaled 546 Bcf as of the week ended May 29--and the five-year-average surplus of 423 Bcf each should expand. The range of analyst estimates spanned from a build of 105 Bcf to 118 Bcf. EIA estimated a 124-Bcf injection for the week ended May 29. Air conditioning demand has been "notoriously absent in key regions over the past few weeks, and last week was no exception with large portions of the [U.S.] East Coast, the South and the West seeing below-normal" cooling demand, FirstEnergy Capital analyst Martin King said. "Not helping to slow injections was a further seasonal recovery in nuclear power plant generation last week and another particularly large jump in hydroelectric output in the West." Gelber & Associates analyst Kent Bayazitoglu said that increased liquefied natural gas imports and lower industrial demand have also bolstered storage injections in recent months. King added that a steep contango in the New York Mercantile Exchange (NYMEX) natural gas futures contracts has provided financial incentive to purchase heavily for storage injections as well. Contango is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery. "Needless to say, the pricing picture for natural gas [producers] remains unpleasant for the near-term with the only hope coming from either sustained heat waves or hurricane disruptions, neither of which are on the short-term forecasting horizon," King said.
The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 106 and 111 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended Friday, June 5, according to a Platts survey of analysts.
An injection within expectations would be the fourth consecutive week of a triple-digit build and would be larger than both the 84-Bcf year-ago and 91-Bcf five-year-average injection. As a result, the year-over-year surplus--which totaled 546 Bcf as of the week ended May 29--and the five-year-average surplus of 423 Bcf each should expand.
The range of analyst estimates spanned from a build of 105 Bcf to 118 Bcf. EIA estimated a 124-Bcf injection for the week ended May 29.
Air conditioning demand has been "notoriously absent in key regions over the past few weeks, and last week was no exception with large portions of the [U.S.] East Coast, the South and the West seeing below-normal" cooling demand, FirstEnergy Capital analyst Martin King said. "Not helping to slow injections was a further seasonal recovery in nuclear power plant generation last week and another particularly large jump in hydroelectric output in the West."
Gelber & Associates analyst Kent Bayazitoglu said that increased liquefied natural gas imports and lower industrial demand have also bolstered storage injections in recent months.
King added that a steep contango in the New York Mercantile Exchange (NYMEX) natural gas futures contracts has provided financial incentive to purchase heavily for storage injections as well. Contango is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery.
"Needless to say, the pricing picture for natural gas [producers] remains unpleasant for the near-term with the only hope coming from either sustained heat waves or hurricane disruptions, neither of which are on the short-term forecasting horizon," King said.