The U.S. government is set to release its natural-gas data for the week, which is expected to show an increase in inventories. This comes as cooling demand has surged due to hot temperatures.
According to a survey by The Wall Street Journal, analysts, brokers, and traders predict that gas in storage rose by 52 billion cubic feet during the week ending July 7. This estimate is slightly below the usual amount. The range of estimates falls between 44 bcf and 56 bcf. Comparatively, last year saw a 59-bcf injection during the same week, with a five-year average increase of 55 bcf.
The Energy Information Administration (EIA) will release the data at 10:30 a.m. ET on Thursday.
If the increase is indeed 52 bcf, it would bring gas stockpiles to a total of 2.929 trillion cubic feet. This represents a 24% increase compared to last year and a 14% increase over the five-year average for this time of year.
In recent years, natural-gas inventories have been below normal due to high demand for gas-fired heating and cooling, coupled with production disruptions caused by storms and other events.
However, gas output reached record highs at the beginning of 2023 and has remained relatively high. Demand, on the other hand, has faced challenges this year due to a mild winter and a contraction in the U.S. manufacturing sector.
Furthermore, liquefied natural gas (LNG) exports have softened recently. All these factors combined have led to a surplus in natural-gas inventory and a decline in prices in futures markets by 41% year to date, currently averaging around $2.636/mmBtu.
