The Platts pre-report analyst survey suggests U.S. EIA data will show a 62 to 66 Bcf addition to natural gas stocks for the latest reporting week

Washington - September 2, 2009

The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 62 and 66 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended August 28, according to a Platts survey of analysts.

Last year, EIA estimated a 92-Bcf injection, while the five-year-average build stood at 64 Bcf. As a result, the 516-Bcf surplus over last year could shrink, and the 500-Bcf surplus over the five-year average likely would remain about the same.

The wider range of analyst expectations spanned a range of builds between 53 Bcf and 73 Bcf. EIA estimated a 54-Bcf injection for the week that ended August 28.

Many analysts expect that storage stocks will fill by the end of October at 3.8 trillion cubic feet (Tcf). EIA recently estimated peak storage capacity at around 3.889 Tcf, a 2.6% increase over last year. Martin King, an energy analyst at FirstEnergy Capital, said the gas market has to inject at or below the five-year average for the remaining weeks of the injection season to reach this level.

"We see this as being entirely possible as a result of demand trends--which are showing slow improvement--and supply, which we think is finally starting to tighten," he said.

King estimated a build for the week ended last Friday of 68 Bcf, largely because last week's weather in the U.S. cooled considerably, he said.

"Another factor to note is that, more so than usual, we expect that a large majority of the injections down to the beginning of the heating season will be almost exclusively focused in the consuming East region," King said.

"Both the West and the producing regions are approaching their operational limits of capacity, so we expect that storage injections in these regions will be much slower than historic norms, especially as we progress through September."