The U.S. Energy Information Agency (EIA) reported on Thursday a smaller-than-expected build in its natural gas storage inventories, Kallanish Energy reports.
Storage injections in the Lower 48 states for the week ending 15 May increased 81 billion cubic feet (Bcf) from the previous week. Total stocks ended the week at 2,503 Bcf, which is 779 Bcf, or 45.2% higher than this time last year.
The volume of working gas in underground storage was 407 Bcf, or 19.4%, above the five-year average of 2,096 Bcf.
Survey among trader and analysts expected a higher build in storage for the week, with median guesses ranging from 84 Bcf to 86 Bcf. But analysts at Energy Aspects forecast the injection increase to be of 94 Bcf.
“With market soundings suggesting that at least 30 cargoes will be cancelled in June and more than six this month, flow data indicate a perceptible shift in (gas) utilization is already taking place,” Energy Aspects said in a report last week.
“This fall in feedgas is happening in anticipation of the large-scale June cancellations. However, flow data also suggest that some facilities are scaling back by far more than others. Cheniere’s facilities in particular are showing a hit versus nameplate capacity utilization.”
The London-based research consultancy noted that one of the biggest issues facing the North American gas market this injection season is how these cargo cancellations will weigh on Henry Hub pricing.
The LNG cancellations could be partially offset by declines in associated gas production, the analysts said, estimating a build of 119 Bcf in the week ending May 22.
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