US EIA sees continued strength in gas storage inventories

US EIA sees continued strength in gas storage inventories

Washington (Platts)--9Aug2005

Making only slight adjustments to its month-ago estimates, the US Energy
Information Administration on Tuesday reported that working gas in storage
totaled roughly 2.42 Tcf at the end of July, 2.2% higher than last year and
7.6% ahead of the five-year average. 

"Above-average storage levels are expected to persist through 2005, assuming
that strong injection levels resume following the recent cooling-related surge
in demand in the power sector," said the August short-term energy outlook.
However, a normal winter "would probably eliminate any storage surplus," it
added. Gas demand is projected to increase by 1.8% this year, to 22.84 Tcf,
and by another 2.4% in 2006, to 23.40 Tcf, "due to an assumed return to normal
weather and continued strength in consumption for electric power production."

Domestic gas output this year and next is expected to remain near the 2004
level, despite an anticipated 16% annual increase in gas-directed well
completions. "Natural gas production, like oil, is subject to uncertainties
regarding the potential impact of hurricanes on production facilities," EIA
noted. 

Preliminary data through May and the projection for June "yield an apparent
decrease in output of about 1% for the first half of 2005 compared to the same
period in 2004," said the report, noting that "improvement in the second half
relates mostly to the assumed recovery from the disruption caused by Hurricane
Ivan in 2004." Finally, imports of liquefied natural gas have exhibited
minimal year-over-year increases through the first half of this year,
according to the report. Total LNG imports for 2005 are expected to be about
690 Bcf, up from 650 Bcf in 2004. "Approaching 700 Bcf for all of 2005 is
likely only if a solid improvement in import levels materializes for the
fall," said EIA.

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