Data from the US Energy Information Administration (EIA) at its Weekly Natural Gas Storage Report (WNGSR) showed that working natural gas inventories in the Lower 48 states in the US reached 3,519 Bcf during the week ending October 11. The figure surpassed the prior 5-year average since September 22, two years ago.
Gas storage in those states have been lower than normal for 106 straight weeks. The injection of more than 100 Bcf during the week helped to break the streak. The storage was lower than the previous average ahead of the winter of 2017–18. Relatively cold temperatures during the period prompted increasing gas use for heating, hence caused record withdrawals from storage.
April through October 2018 saw sustained warmer-than-normal temperatures which led to increasing electricity consumption for air cooling. This caused slowdown in the injection activity during last year’s summer and fall. As of November 30, 2018, the storage was 725 or 20% lower than the 5-year average.
The level of working natural gas storage tends to be inversely related to prices at the Henry Hub. Front-month futures prices at the hub fell to $1.67/MMBtu in early 2016 when the storage rose 874 Bcf above the previous 5-year average. In contrast, prices soar to the highest level in several years by the winter of 2018–19 when storage fell 725 Bcf below the prior 5-year average.
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Published on October 21, 2019 8:58 PM (GMT+8)Last Updated on January 17, 2020 2:13 AM (GMT+8)
