Natural Gas Storage in Good Shape for Winter
Working natural gas in storage ended October at 3,571 billion cubic feet (Bcf), a record increase of 2,734 Bcf during the April 1 to October 31 injection season, and within 7 percent of the average of the last five end-of-season storage levels, according to the US Energy Information Administration.
Increased natural gas production and new pipeline projects will help meet winter natural gas demand. Higher production means that even if this winter were as cold as last year, EIA expects that natural gas storage at the end of March 2015 will be above its March 2014 level.
Heading into the refill season last spring, inventories were at an 11-year low after a prolonged and severe winter, about 1,000 Bcf lower than the five-year (2009-13) average. Although the refill season began slowly in April, injections quickly ramped up and exceeded five-year average levels for 28 weeks in a row. The gap between the five-year average and current inventories has now narrowed to 261 Bcf.
Analysts often refer to the injection season as ending on October 31, but the peak in storage inventories may come later, as it is common for injections to continue into November.
High levels of injections over the summer were possible because of relatively low natural gas demand from the electric power sector as well as substantial increases in domestic natural gas production. Relatively mild summer temperatures led to lower than expected demand for air conditioning, allowing natural gas to go to underground storage facilities rather than to electric power generators. Bentek data from April through October indicate consumption of natural gas in the electric power sector averaged about 2 percent less than last year’s level and roughly 16 percent below its level during the summer of 2012.
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