The Platts pre-report analyst survey suggests U.S. EIA data will show a 72 to 76 Bcf addition to natural gas stocks for the latest reporting week

Washington - September 16, 2009

The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 72 and 76 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended September 11, according to a Platts survey of analysts.

An injection within expectations would be larger than last year's 65-Bcf build but less than the five-year-average addition of 82 Bcf, according to EIA. As a result, the 495-Bcf surplus over last year will likely expand and the 503-Bcf surplus over the five-year average is expected to contract.

A build in line with analysts' expectations would put overall stocks over the 3.4-trillion cubic feet (Tcf) mark with about two months still remaining in the injection season. The broad range of pre-report analyst expectations ranged from a build of 60 Bcf to 86 Bcf.

Kent Bayazitoglu, director of market analytics at Gelber & Associates, said cooler weather and the U.S. Labor Day holiday likely prompted a larger injection.

"The last two injections, both smaller than expected, helped spark sharp rallies," he said. "While demand will be low for the coming months, the shrinking availability of storage levels will pare down injection amounts."

Jefferies & Co. analyst Subash Chandra said he expects a 76-Bcf injection this week. "Our power survey indicates a 5% sequential and 7% year-on-year decline" in electricity demand, he said, adding that he has modeled 2 Bcf per day of gas production curtailments.

"Otherwise injections would be almost triple-digits," he said. "We are wary of a production reversal as spot gas has recovered from the September 4 low. Eastern storage is 347 Bcf away from full, [the] West is 48 Bcf and [the producing region] is 103 Bcf."