US natural gas futures climb 1.2% as storage build falls short
Inventories reached 3.567 trillion cubic feet, 1.3% above the five-year average, while LNG export flows rose 8.2% to 20 billion cubic feet a day
Published
US natural gas futures rose 1.2% to $3.236 per million British thermal units on Thursday after the latest storage report showed an injection of 67 billion cubic feet, below the 74 bcf that forecasters had expected and well under the five-year average build of 90 bcf.
Inventories stood at 3.567 trillion cubic feet, 1.3% above the five-year average. LNG export flows rose 8.2% to 20 billion cubic feet a day, adding a second draw on supply even as storage remains slightly ahead of its seasonal norm.
The shortfall breaks a pattern of injections running ahead of consensus that had held since mid-September, including an 85 bcf build on October 8 that beat forecasts. In prior weeks, that storage comfort had been put down to ample production. Marcellus Drilling News reported that TC Energy declared force majeure on its Mountaineer XPress pipeline in West Virginia on September 24 after a mechanical issue, stranding about 1.8 billion cubic feet a day of Marcellus and Utica gas, and that Columbia Gas Transmission said the following day it had located the leak and expected a weekend repair. Separately, the newsletter THE BASELOAD reported that US gas production had slipped from a record 113.3 billion cubic feet a day to 111.5 so far in October, citing pipeline problems in Kentucky, Texas and West Virginia among the causes.
The smaller build narrows the storage cushion built up heading into the withdrawal season, a shift from weeks when ample output kept the market comfortable. Warmer weather forecasts are working the other way, capping near-term heating demand and limiting how far that cushion can tighten.