U.S. gas stock build reported today is 2nd smallest for this week in 20 years
May 16, 2024
Key Observations:
U.S. working inventories of natural gas increased by 70 Bcf in the week ending May 10, according to data published today by the U.S. Department of Energy.
The five-year average change for the reference week in this seasonal build exceeds 90 Bcf. The median estimate in a Bloomberg survey ahead of the data was 77 Bcf in a range from 72 to 81 Bcf.
In percentage terms, the reported gas stock build (+2.7%) is the second smallest for the reference week in the past 20 years, behind only 2012 (+2.3%). Last year's build was +4.6%.
Strong demand is curbing the pace of inventory accumulation ahead of next winter's gas heating season. U.S. industrial sector demand for natural gas has averaged 23.55 Bcf/d ytd (+12.5% YoY) through today. Over the same interval, U.S. power sector demand for natural gas has averaged 31.59 Bcf/d (+4.6% YoY). Total U.S. gas demand in 2024 is running +3.4% over a year ago ytd.
While the level of U.S. gas inventories is 18% higher than a year ago, the stock level must be measured against the strength of gas demand. A useful and relevant metric to know in this context: the YoY % change in the 365-day moving average for U.S. industrial gas demand troughed at –9.2% on 12-Sep-2023 and now stands at +3.6%.
Benefits: NGM24, NGV24, NYM gas strips, AR, EQT, RRC, CTRA, OKE (fresh 52-week high today).
Source: Bloomberg, EIA, Genscape, Blacklight Research. Note: the prompt Jun-24 NYM natural gas futures contract (NGM24) advanced to $2.57 per MMBtu intraday on May 16. That level marked a +31% price advance from the April 16, 2024 close for NGM24 ($1.96).
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