Working natural gas in storage rose to 2,611 Bcf as of Friday, July 8, according to EIA’s WNGSR (see Storage Figure). After an 84 Bcf net build, stocks are now 52 Bcf below the 5-year average and 218 Bcf below last year. The build was less than the 5-year average build of 88 Bcf ending three consecutive weeks of above average builds. Last year saw a stock build of just 78 Bcf during the same week.
Stocks last week grew at an above average pace in the East and West Regions while the Producing Region lagged behind. While stocks in the East and West regions remain well below the 5-year average levels, the gap has been narrowing for the past four weeks in the East and the past five weeks in the West. The Producing Region, which has seen mostly larger than average builds in 2011, has recently had relatively small builds. It remains well above average stock levels for this time of year.
Temperatures in the lower 48 States during the week ending July 7 were warmer than normal and warmer than last year. The National Weather Service’s degree-day data show that the temperature in the lower 48 States last week averaged 77.1 degrees, 2.9 degrees warmer than normal, and 2.3 degrees warmer than last year (see Temperature Maps and Data) Temperature Maps and Data). This marks the highest average temperature so far this year. All regional temperatures were above normal levels, and all regions outside the Northeast were warmer than last year. Cooling degree-days were about 26 percent above normal.
Other Market Trends
LNG Sendout at Lowest Levels in Years. According to data from BENTEK Energy, LNG sendout from U.S. import terminals is at its lowest level in the more than 6 years for which BENTEK has data. Month to date, LNG sendout has averaged 380 million cubic feet (MMcf) per day, more than 50 percent lower than the level for June 2011. Between 2005 and 2010, July sendout has averaged 1.6 Bcf per day, partially driven upward by a very high sendout of almost 3 Bcf per day in July 2007. Year-to-date, sendout has averaged 867.2 MMcf per day. Currently, most imports to the United States arrive at the Suez Energy North America's Everett LNG terminal in Everett, Massachusetts and at El Paso Corp.'s Elba Island LNG terminal in Elba Island, Georgia. Both of these facilities have long-term contracts. LNG imports in the United States have been at historically low levels as a result of much higher prices for spot LNG elsewhere in the world, specifically in Asian and European markets. In recent months, nuclear power outages resulting from the March earthquake and tsunami in Japan have led the country to rely more on LNG, which has contributed to higher global LNG prices. Additionally, recent growth in production in the United States also has reduced domestic natural gas prices and the need for imports.