The U.S. government is set to release natural gas data on Thursday, which is anticipated to reveal a smaller-than-usual increase in inventories. This can be attributed to the scorching heatwave that has overtaken Texas and the rest of the Southern Plains, leading to heightened demand for gas-fired cooling.
According to a survey conducted by The Wall Street Journal, analysts, brokers, and traders are projecting a 24 billion cubic feet rise in gas inventories for the week ending August 4th. Estimates range from 17 billion cubic feet to 39 billion cubic feet. In comparison, last year saw a 44 billion cubic feet increase during the same week, with a five-year average rise of 46 billion cubic feet.
The Energy Information Administration (EIA) is scheduled to release the official natural-gas storage data at 10:30 a.m. ET on Thursday.
If the anticipated 24 billion cubic feet increase holds true, total gas stockpiles would amount to 3.025 trillion cubic feet. This figure is 21% higher than last year’s total at the same time and 11% above the five-year average for this period.
Throughout most of last year, natural-gas inventories remained low due to robust demand from gas-fired heating and cooling systems, as well as production disruptions caused by storms. However, domestic natural-gas production reached record highs at the start of this year and has remained strong. On the other hand, demand has been lackluster due to the mild winter and weakened demand from the U.S. manufacturing sector.
Recent weeks have shown signs of changing circumstances, with demand rates starting to improve. If Thursday’s data aligns with expectations, the surplus in inventory would effectively be reduced by half, bringing it down to an 11% surplus compared to a peak of 22% in late April.
In conclusion, the upcoming natural gas data is highly anticipated due to the impact of the ongoing heatwave. The expected increase in inventories is likely to provide insights into the changes in demand and supply dynamics within the natural-gas sector.