Platts pre-report analyst survey suggests US EIA data will show an 67- to 71-Bcf addition in natural gas stocks

Washington - September 29, 2010

The US Energy Information Administration (EIA) is expected Thursday to report a net injection of 67 to 71 billion cubic feet (Bcf) to natural gas storage for the week that ended September 24, according to a Platts survey of analysts.

A build within that range would be slightly larger than the 65-Bcf build in the comparable week of 2009 and in line with the five-year-average of 67 Bcf, according to the EIA. As a result, the 175-Bcf deficit to last year is expected to shrink, while the 195-Bcf surplus over the five-year average will likely remain intact or grow slightly.

Beyond the consensus, the broader range of analyst estimates for the week that ended September 24 spanned from injections of 62 Bcf to 86 Bcf.

Kent Bayazitoglu, director of market analytics at Gelber & Associates, said the last two storage reports have made it unclear whether the market is oversupplied or undersupplied.

"Storage has explored both sides of the spectrum," he said. "According to our weather-based gas usage models, the 103-Bcf injection reported two weeks ago was way too high and the 73-Bcf injection reported last week was way too low. It appears that the reports more or less balanced each other out."

7 But FirstEnergy Capital analyst Martin King said the “underlying story for this market has not changed: on a weather-adjusted basis, there is still too much gas, structural demand is showing no signs of increasing and supply showing no signs of stopping its growth. As such, the market appears oversupplied on structural basis to the tune of 1 Bcf per day (/d) to 2 Bcf/d compared to this time last year, with little reason to mount any kind of price rally."

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This analyst survey is conducted by Platts’ editorial team in Washington, DC and is published every Wednesday morning, one day ahead of the 10:30 a.m. (ET) Thursday release of the weekly natural gas storage report of the U. Energy Information Administration. Platts has been conducting this survey since January 2007. The survey includes 15 to 25 analysts, some on a rotational basis.

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