According to the latest report from the EIA, working natural gas stocks in the United States saw a substantial increase. Stocks rose by 79 billion cubic feet (Bcf), bringing the total to 2,563 Bcf. This marks a significant year-over-year increase of 444 Bcf. Current stockpiles are considerably above the five-year average, having grown by 640 Bcf compared to the average of 1,923 Bcf.
This May week's natural gas market overview reveals a complex interplay of supply and demand dynamics, according to recent data from S&P Global Commodity Insights:
Supply Overview
The total supply of natural gas in the U.S. slightly increased by 0.2%, or 0.2 Bcf/d, from the previous week. This minor increase is primarily attributed to a 6.6% rise in net imports from Canada, which added 0.3 Bcf/d. Conversely, dry natural gas production saw a small decline of 0.2% or 0.2 Bcf/d, totaling an average of 98.8 Bcf/d.
Demand Insights
On the demand front, total U.S. consumption of natural gas decreased by 1.8% or 1.2 Bcf/d from the last report. The residential and commercial sectors experienced a notable decrease of 15.6% or 2.3 Bcf/d. However, there was a 4.0% increase in natural gas used for power generation, adding 1.3 Bcf/d. Industrial consumption slightly fell by 0.8% or 0.2 Bcf/d. Exports to Mexico increased by 0.8% or 0.1 Bcf/d, and deliveries to U.S. LNG export facilities slightly rose by 0.1 Bcf/d to an average of 12.3 Bcf/d.
LNG Market Dynamics
Deliveries to LNG terminals in the U.S. also saw a weekly increase of 0.6% or 0.1 Bcf/d. However, regional shifts were significant: deliveries in South Louisiana decreased by 9.5% or 0.8 Bcf/d to 7.7 Bcf/d, while those to South Texas jumped by 37.4% or 0.9 Bcf/d to 3.3 Bcf/d. Outside the Gulf Coast, deliveries remained steady at 1.2 Bcf/d. In the same week, 22 LNG vessels departed from U.S. ports, carrying a combined LNG capacity of 79 Bcf.
Rig Count Trends
The natural gas rig count dropped by three rigs to 102, according to Baker Hughes. Meanwhile, oil-directed rigs decreased by seven to 499 rigs.
Storage and Projections
Net injections into natural gas storage were 79 Bcf for the week, close to the five-year average of 81 Bcf but higher than last year's injections of 71 Bcf during the same period. Current working gas stocks stand at 2,563 Bcf, which is 33% above the five-year average and 21% higher than last year, indicating robust reserves that could influence future market behavior.
