U.S. natural gas inventories climbed by 46 billion cubic feet (Bcf) last week, keeping total storage comfortably above seasonal norms. But while the headline number suggests plenty of supply, traders aren’t relaxing just yet — not with record-breaking heat and LNG exports tightening balances beneath the surface.
The build for the week ending July 11 brings total working gas in storage to 3,052 Bcf, according to today’s figures provided by the Energy Information Administration. That’s 178 Bcf above the five-year average of 2,874 Bcf, but 156 Bcf below the unusually high levels seen at this time last year.
Despite that year-over-year gap, the current surplus to the five-year average offers a buffer — for now. But with power burns rising and demand from LNG terminals holding steady, the market is watching closely for signs that storage builds could start slipping behind pace.
Regionally, the Midwest led injections with a 20 Bcf build, followed by the East at 12 Bcf. Notably, the South Central region added just 6 Bcf overall, driven by a 4 Bcf withdrawal from salt cavern storage — a potential early sign that intense air-conditioning demand is beginning to show up in the numbers. This week’s regional breakdown suggests injections may already be under pressure from shifting power demand patterns.
Natural gas prices climbed following the release. As of midday Thursday, Henry Hub front-month futures were trading at $3.591, up 1.13% on the day. With scorching heat expected to persist across key demand regions and LNG exports staying strong alongside tightening pipeline maintenance schedules, any future slowdown in storage builds could tighten the market further heading into August.
For now, storage remains within the five-year range, and the market is well-supplied on paper. But if demand continues to outpace expectations, today’s balanced headline may look far more precarious in hindsight. Next week’s EIA report will be critical in signaling whether this trend is holding — or beginning to break.
By Julianne Geiger for Oilprice.com
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