Higher demand for heating and record LNG exports left U.S. natural gas in storage at the end of the winter at its lowest level in three years, after larger-than-normal storage withdrawals this past winter, the Energy Information Administration (EIA) said on Friday.
Because of the higher withdrawals, by the end of March, the U.S. had the least amount of natural gas in underground storage in the Lower 48 states since 2019.
Working natural gas in underground storage facilities in the Lower 48 states totaled 1,387 billion cubic feet (Bcf) as of the last day of March this year. Inventories were 17 percent lower than the previous five-year average (2017–21) for that time of year, EIA’s Weekly Natural Gas Storage Report showed on Thursday.
A colder January 2022 and record-high U.S. liquefied natural gas (LNG) exports led to more withdrawals despite the fact that domestic production of natural gas increased, the EIA says.
The U.S. is exporting record volumes of LNG as the United States looks to help European allies with non-Russian gas supply.
Following the Russian invasion of Ukraine, the European Union and the United States announced at the end of March a deal for more U.S. LNG exports to the EU as the latter seeks to replace Russian supplies, on which it is dependent. According to the terms of the deal, the United States will deliver at least 15 billion cubic meters of liquefied natural gas to the EU this year more than previously planned, the White House said in a fact sheet.
Earlier this month, U.S. shale gas and LNG producers met with delegations from several EU member states eager to boost their purchases of U.S. LNG. This eagerness could be crucial for final investment decisions on new LNG export capacity.
Record LNG exports out of the U.S. have sent the benchmark Henry Hub front-month futures to above $7 per per million British thermal units (MMBtu) this week, after the price hit $6/MMBtu just last week.
By Tsvetana Paraskova for Oilprice.com