US working natural gas in storage started the injection season with levels well above the five-year average. After the onset of the coronavirus pandemic, heavy US demand destruction was anticipated, which would add to the storage glut. However, residential and commercial and gas-fired generation demand have remained resilient.
From a global perspective, the pandemic has led to a steep drop in US LNG exports. LNG feedgas demand started out 2020 setting record highs, nearing 9 Bcf/d, but the softened global demand picture has cut feedgas deliveries in half. US storage levels are expected to enter the heating season in November with than 4 Tcf underground, but lower associated gas production in oil-rich basins adds an element of downside risk.
Commodities Focus