US Natural Gas Storage Levels Dragged Down by Surge in Demand and LNG Commitments

Natural gas storage levels in the US are being dragged down by a surge in demand and commitments to liquefied natural gas exports. Power demand, which peaks in the summer months, is putting a strain on available supplies.

According to data from IIR Energy, working gas inventories were only 0.1% above year-ago levels as of Wednesday, but 7.5% higher than the five-year average for this time of year.

The growing demand for electricity, partly driven by a heat wave affecting parts of the country, has led to an increase in natural gas consumption in the electric power sector. This trend is expected to continue, with federal data showing that both home-heating and home-cooling days are on pace to increase from current levels by next year.

The expansion of LNG exports is also contributing to the strain on natural gas supplies. A near 8% year-on-year increase in LNG exports by 2027 surpasses the expected increase in total US natural gas production.