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US Natural Gas Storage Likely to Decline

According to experts, the US Natural Gas volumes are expected to fall by about half the five-year average. It looks to possibly be the final net draw of the heating season, with injections starting ahead of schedule. It is hampering the strength of the Henry Hub summer strip. According to a survey of analysts by S&P Global Platts, The US Energy Information Administration is expected to report a 21Bcf withdrawal for the week ending on 19th March. Responses to the survey ranged from a 7-30 Bcf pull.

The 21 Bcf draw would be less than the 26 Bcf withdrawal of the same week last year and the five-year average of 51 Bcf. The EIA reported an 11 Bcf decline in the prior week, making this week’s withdrawal stronger. A ramp-up in LNG feed gas or Natural Gas tightened balances and modestly colder temperatures compared to the week prior.

According to S&P Global Platts Analytics, the enormous regional change came out of the Midwest, where sample storage activity flipped from a net injection of 2 Bcf in the prior week of the withdrawal of 5 Bcf this week. A string of EIA storage reports caused demand destruction from the arctic blast in February remains the key variable. The South Central consumption largely impacted industrial consumption.

ERCOT power loads are still weak on a weather-adjusted basis. This indicates that the industries are consuming lesser than the pre-freeze-off levels. Apart from the industrial, the majority of other demand sectors were modestly up when compared to the last week.

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