Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report, Short-Term Energy Outlook
Working natural gas in storage has surpassed five-year average levels
for the first time in more than a year. At 2,157 billion cubic feet
(Bcf) as of February 13, stocks are 58 Bcf greater than the five-year
average. Recent extremely cold weather may result in high stock
withdrawals for the week ending February 20, which could again push
stocks below their five-year average. However, natural gas production in
February and March that is forecast to average 5 Bcf/day above the
year-ago level is likely to contribute to healthy inventories and
moderate prices as the nation moves from winter into spring.
At no
point during 2014 did inventories surpass their five-year average; the
most recent excess was on November 22, 2013. Inventories ended the 2013-14 winter withdrawal season last March at a 10-year record low of 837 Bcf.
After a record injection season in 2014 (April-October), weekly working
gas inventories reached a seasonal peak on November 7, 2014, of 3,611
Bcf, but were still 237 Bcf below the five-year average of 3,848 Bcf for
that week.
While there had been several near-record withdrawals early this heating season,
withdrawals so far this season have been significantly lower than the
record levels of last winter, and 16% lower than the five-year average.
Recent production growth and moderate demand have allowed for the
increase in storage, and have also led to relatively low prices. The
most recent Short-Term Energy Outlook (released February 10) projects inventories will end the injection season at 1,699 Bcf, 43 Bcf more than the five-year average.
Increasing
natural gas production has helped to displace some of the need for
storage during peak-use periods. Dry natural gas production has averaged
71.7 Bcf/d since November 1, as reported by Bentek Energy,
approximately 6.3 Bcf/d more than production for the same period last
winter. This higher level of production is forecast to continue through
the end of the heating season. EIA's Short-Term Energy Outlook forecasts that February and March production will average 72.7 Bcf/d, 5.0 Bcf/d higher than during the same period in 2014.
At
a national level, lower natural gas consumption this winter has also
reduced the need to withdraw natural gas from storage. Above-average
temperatures experienced in the western half of the United States so far
this winter have helped to offset the effects of colder weather in
other parts of the country, dampening overall natural gas consumption.
According to data from Bentek Energy, since November 1, U.S. natural gas
consumption has averaged 88.4 Bcf/d, 3.3 Bcf/d lower than the same
period last year. With closer-to-normal temperatures reducing
residential and commercial consumption, EIA forecasts that total natural
gas consumption in the United States will average 88.1 Bcf/d for the remainder of the heating season (February-March) in 2015, compared with an estimated 90.9 Bcf/d during that period in 2014.
Henry
Hub spot and Nymex near-month futures prices for natural gas have
remained at relatively low levels for the past few months, falling from
prices above $4 per million British thermal units (MMBtu) in November.
The Henry Hub spot price and Nymex near-month contract have traded below
$3/MMBtu since January 20. While the national benchmark price remains
low, regional natural gas spot prices, particularly those in New York
and Boston, have spiked this winter, reflecting high demand and transportation constraints in times of extreme cold.
Principal contributors: Katie Teller, Scott Bradley
http://theenergycollective.com/todayinenergy/2197181/natural-gas-inventory-exceeds-five-year-average-first-time-november-2013
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