According to EIA’s Weekly Natural Gas Storage report the working natural gas inventories in the Lower 48 states reached 3,519 billion cubic feet (Bcf) for the week ending October 11, 2019, exceeding the previous five-year average since September 22, 2017.
Specifically, the weekly injections in three out of the four weeks surpassed 100 Bcf, or about 27% more than typical injections for that time of year. The inventories on the five regions are based on varying commercial, risk management, and reliability goals.
This week’s inventory level ends a 106-week streak of lower-than-normal natural gas inventories. Also, the inventories in the Lower 48 states entered in winter of 2017-2018 lower than the previous average. Yet, cold temperatures during 2017-2018 weekend led to a record withdrawal from storage, increasing the deficit to the five-year average.
During the refill season, April through October, the electricity demand for natural gas increased due to warmer-than-normal temperatures. The demand also affected natural gas injection activity during summer and fall of 2018.
According to EIA, by November 30, 2018, the deficit to the five-year average had increased to 725 Bcf. That week’s inventories were 20% lower than the previous five-year average for that time of year.
During 2019 refill season experienced record levels of US natural gas production led to relatively high injections of natural gas into storage and reduced the deficit to the previous five-year average.
Also, the deficit declined as 2018’s low inventory levels are rolled into the previous five-year average. For this week in 2019, the preceding five-year average is about 124 Bcf lower than it was for the same week last year. Consequently, the gap has closed in part based on a lower five-year average.
EIA also expected that summer’s natural gas prices would be the lowest summer average Henry Hub natural gas price since 1998, based on its July 2019 Short-Term Energy Outlook.
Concluding, for winter 2018-2019, EIA reports that natural gas front-month futures prices reached their highest level in several years. Natural gas inventories fell to 725 Bcf less than the previous five-year average on November 30, 2018. In recent weeks, increasing the Lower 48 states’ natural gas storage levels have contributed to lower natural gas futures prices.
