Central region

U.S. EIA reclassifies gas in South Central region, resulting in 71 billion cubic feet of storage injection

Strong points

An investigation called for an injection of 70 billion cubic feet

Henry Hub Summer Strip Tops $3/MMBtu

U.S. natural gas storage volumes rose 71 billion cubic feet, or 1 billion cubic feet more than an S&P Global Platts survey had expected, as 4 billion cubic feet of inventory of working gas in the south-central region have been reclassified as base gas.

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Storage inventories rose to 2.029 Tcf for the week ended May 7, the US Energy Information Administration reported on May 13. , or 15.7%, less than the level a year ago of 2.407 Tcf and 72 Bcf, or 3.4%, less than the five-year average of 2.101 Tcf.


The south-central region is responsible for most of the growing shortfall, with lower inventories of 197 billion cubic feet year over year. This is partly due to the substantial growth in demand that has accumulated in the region. Total demand for the week ended May 7 averaged 8 billion cubic feet per day higher than a year earlier, according to S&P Global Platts Analytics. Much of the growth came from increased feedstock deliveries to Gulf Coast LNG facilities and increased exports to Mexico.

The NYMEX Henry Hub June contract was static at $2.97/MMBtu in trade on May 13. The summer balance averaged $3.01/MMBtu, 14 cents lower than the upcoming winter band, November through March.

Platts Analytics’ supply and demand model currently predicts an injection of 55 billion cubic feet for the week ending May 14, which would be 31 billion cubic feet below the five-year average.

Residential and commercial loads increased by approximately 3 Bcf/d week over week. The spike in home heating demand was somewhat mitigated by a 1.9 Bcf/d drop in electricity consumption demand. Overall, total demand is up 1.3 Bcf/d week over week, for an average of 87.1 Bcf/d.

Upstream supplies have been particularly stable, with the largest change coming from a 200 MMcf/d increase in net Canadian imports to meet growing demand for res-comm, followed by an increase of 100 MMcf/d of onshore production, which increased total supply by around 400 MMcf/d over the week to an average of 95.1 Bcf/d.

Falling gas yields in the United States have tightened supply, as have Mexico and increased LNG exports, leading to tighter balances and an increase in the shift from gas to coal. As stocks head into the summer low, the outlook looks optimistic, especially if the weather turns hot. However, Platts Analytics believes that the current forward curve is a bit exaggerated and that generation will increase at these prices as wind and solar increasingly offset gas-fired power demand.