Natural gas storage injections continued to outpace the 5-year (2009-13) average, with inventories as of Sept. 5 at 2.80 tcf, according to data from the Weekly Natural Gas Storage Report (WNGSR) by the US Energy Information Administration.
Due to an unusually cold winter during 2013-14, gas inventories ended March 2014 almost 1 tcf lower than the 5-year average. As of Sept. 5, relatively higher weekly net injections into storage reduced that deficit to 463 bcf.
EIA's latest Short-Term Energy Outlook (STEO) expects that this trend will continue, with forecast inventories of 3.47 tcf by the end of October, 355 bcf below the 5-year average and the lowest end-October level since 2008.
However, increasing new production is expected to mitigate the effect of these lower inventories on winter natural gas markets, as evidenced by decreasing seasonality in natural gas futures contracts.
“Although the injection season began slowly, injections have exceeded their average comparable-week levels in each week since April 18,” EIA said.
Strong domestic production growth and mild demand have supported strong injections through the summer. Dry natural gas production increased to 70.2 bcf/d in June, up nearly 6% from a year earlier, while mild weather reduced natural gas use for electric generation. Natural gas prices have also fallen during the injection season.
