The Platts pre-report analyst survey suggests U.S. EIA data will show an 96 to 100 Bcf build to natural gas stocks for the latest reporting week

Washington - June 24, 2009

The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 96 and 100 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended June 19, according to a Platts survey of analysts.

An injection within expectations would come in larger than that a year earlier, when the build was 85 Bcf, and the five-year-average injection of 84 Bcf, according to EIA.

As a result, the surplus over the same point in 2008 and the five-year average -- 622 Bcf and 472 Bcf, respectively, as of the week ended June 12 -- will likely each expand.

The full range of analyst estimates spanned from a build of 90 Bcf to 104 Bcf. EIA estimated a build of 114 Bcf for the week ended June 12.

In the week that ended June 19, the weather was "downright cool in many parts of the [U.S.] Northeast," FirstEnergy Capital analyst Martin King said.

Coupled with lower demand from power generators and a solid contango in futures prices, "storage injections have had little choice but to remain strong," he said. Contango is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery.

While some have noted that warmer-than-average weather is set to move into major U.S. consuming regions over the next couple of weeks, Gerdes Group head John Gerdes said that the pace of injections so far has been highly bearish.

"Over the past five weeks, approximately 550 Bcf has been shoved into U.S. storage facilities, which equates to nearly 30% of what is typically injected over an entire 31-week cooling season," Gerdes said.