South Central Gas Storage Draws Down as Heat and LNG Recovery Fuel Demand

The South Central natural gas storage region saw a significant drawdown of supplies during the week ending August 21, as high demand and recovering liquefied natural gas (LNG) activity put upward pressure on the market.

According to Natural Gas Intelligence, operators in the region drew heavily from storage, resulting in a net withdrawal of 19 billion cubic feet (Bcf). This has reduced regional stocks to 1,127 Bcf and widened the year/year deficit to 5.9%.

The strong demand was driven by sweltering heat, which put upward pressure on natural gas prices. The Henry Hub price index saw a corresponding increase during this period.