That was much lower than the 58 bcf build that analysts forecast in a Reuters poll and compares with an injection of 35 bcf during the same week last year and a five-year (2014-18) average build of 49 bcf for the period. The increase last week boosted stockpiles to 2.738 trillion cubic feet (tcf), 3.9% below the five-year average of 2.849 tcf for this time of year.
The amount of gas in inventory has remained below the five-year average since September 2017. It fell as low as 33% below that average in March 2019. But with production expected to keep growing, analysts said, stockpiles should reach a near-normal 3.7 tcf by the end of the summer injection season on October 31. Front-month gas futures for September delivery on the New York Mercantile Exchange rose 8.9 cents, or 4.2%, to settle at $2.232 per million British thermal units (mmBtu). That is the highest close and the biggest daily percentage gain since July 31.
Prior to Thursday's rally, the contract mostly traded within a dime of its $2.070 per mmBtu close on August 5, which was lowest settle since May 26, 2016. Analysts said futures have traded near multi-year lows since May because record production and mild spring weather allowed utilities to inject huge amounts of gas into storage, shrinking a massive inventory deficit and removing concerns about shortages this winter even though power demand and liquefied natural gas (LNG) exports are on track to hit all-time highs.
With warmer weather expected next week, Refinitiv projected demand in the lower 48 US states would rise from an average of 90.3 billion cubic feet per day (bcfd) this week to 92.3 bcfd next week as more gas flows to LNG export terminals and power generators burn more of the fuel to meet rising air-conditioning use. That was close to Refinitiv's estimates on Wednesday.
Refinitiv projected gas flows to LNG export terminals would rise from around 4.0 bcfd this week to an estimated 4.8 bcfd next week as units at Cheniere Energy Inc's Sabine Pass in Louisiana and Corpus Christi in Texas exit outages and new units enter service at Freeport LNG's Freeport in Texas and Kinder Morgan Inc's Elba in Georgia.
Traders said they expect the LNG Jurojin tanker, which is sitting off the coast of Freeport, to be the first to pick up a cargo at the plant. Refinitiv's interactive map shows the tanker is expected to dock at the terminal on Aug. 15. The company has not identified the vessel that will pick up the first cargo but said it expected to load that cargo in coming weeks.
Gas production in the Lower 48 states, meanwhile, edged up to 91.4 bcfd on Wednesday from a one-week low of 91.1 bcfd on Tuesday due to small declines in Texas and West Virginia, according to Refinitiv. That compares with an all-time high of 91.9 MW on August 12.