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Working gas in underground storage in the Lower 48 states increased by 28 billion cubic feet (Bcf) in the week to July 14, the EIA said on Thursday, but the build was less than analysts had expected, sending natural gas prices higher.
At 12:54pm on Thursday, natural gas futures for delivery in August were up 0.59 percent at US$3.084/MMBtu.
Analysts had expected a build of 32 billion Bcf.
As of July 14, working gas in storage was 2,973 Bcf, the EIA has estimated. At the end of last week, stocks were 299 Bcf less than this time last year and 141 Bcf above the five-year average of 2,832 Bcf. At 2,973 Bcf, total working gas is within the five-year historical range, the EIA noted.
In the week to July 7, working gas in underground storage had increased from 2,888 Bcf to 2,945 Bcf.
U.S. demand for natural gas is expected to be high to very high for the week ahead, with the weather forecasts pointing to hot weather in most parts of the United States.
Natural gas inventories reached a record high of 4,047 Bcf on November 11, 2016, and inventories ended the winter heating season at 2,072 Bcf in March 2017, the EIA said in its latest Short-Term Energy Outlook. Inventory builds have been slightly below average thus far during the injection season, and EIA expects inventories to be 3,940 Bcf at the end of October 2017, which would be 2 percent higher than the five-year average level for the end of October, but 2 percent lower than the 2016 end-of-October level.
As far as natural gas prices as concerned, the EIA said that “closer-to-normal winter temperatures are expected this winter following last year’s warm winter, which contributes to growth in residential and commercial consumption. Also, export growth is forecast to increase in the second half of 2017 and in 2018. Both factors could contribute to modest upward price pressure.” The EIA currently expects Henry Hub natural gas spot prices to average US$3.10/MMBtu this year and US$3.40/MMBtu next year.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.