US natgas futures slip on weaker demand and export forecasts

The US Energy Information Administration (EIA) said utilities injected 81 billion cubic feet (bcf) of gas into stor
21 May, 2020
  • The US Energy Information Administration (EIA) said utilities injected 81 billion cubic feet (bcf) of gas into storage during the week ended May 15.
  • The build boosted stockpiles to 2.503 trillion cubic feet (tcf), 19.4pc above the five-year average of 2.096 tcf for this time of year.
  • US LNG exports averaged 6.6 bcfd so far in May, down from a four-month low of 8.1 bcfd in April and a record 8.7 bcfd in February.

The US Energy Information Administration (EIA) said utilities injected 81 billion cubic feet (bcf) of gas into storage during the week ended May 15.

That is less than the 83-bcf build analysts forecast in a Reuters poll and compares with an increase of 101 bcf during the same week last year and a five-year (2015-19) average build of 87 bcf for the period.

The build boosted stockpiles to 2.503 trillion cubic feet (tcf), 19.4pc above the five-year average of 2.096 tcf for this time of year.

Front-month gas futures for June delivery on the New York Mercantile Exchange fell 3.8 cents, or 2.2pc, to $1.733 per million British thermal units at 10:36 a.m. EDT 1436 GMT).

Before EIA released the storage report, the contract was down 2.0pc.

Looking ahead, futures for the balance of 2020, and calendar 2021, were trading about 26pc and 53pc over the front-month, respectively, on expectations the economy will snap back once governments lift travel restrictions.

Data provider Refinitiv said average gas output in the US Lower 48 states fell to 89.6 billion cubic feet per day (bcfd) so far in May, down from an eight-month low of 92.9 bcfd in April and an all-time monthly high of 95.4 bcfd in November.

Refinitiv said US pipeline exports to Canada averaged 2.2 bcfd so far in May, down from 2.4 bcfd in April and an all-time monthly high of 3.5 bcfd in December.

Pipeline exports to Mexico averaged 4.6 bcfd so far this month, down from 4.7 bcfd in April and a record 5.6 bcfd in March.

US LNG exports averaged 6.6 bcfd so far in May, down from a four-month low of 8.1 bcfd in April and a record 8.7 bcfd in February.

In the Pacific Northwest, low demand and ample hydro and wind power drove electric prices at the Mid-C hub to a record low below zero for the first time, according to Refinitiv data going back to 2010.

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