There seems to be nothing that will change the continued trend of the increasing amounts of natural gas being injected in the storage system. We won’t go into all the various reasons in detail as it has been covered in previous posts. Mild weather, moderate hurricane season and the continued high production levels of natural gas producers… that’s it in a nutshell.
Working gas in storage increased by 85 Bcf to a total of 3,499 Bcf as of Friday, October 1, 2010, according to the US Energy Information Administration (“EIA”) estimates. Analysts polled by Platts were expecting a net injection of 74 billion to 78 billion cubic feet.Stocks were 149 Bcf less than last year at this time and 220 Bcf above the 5-year average of 3,279 Bcf. At 3,499 Bcf, total working gas is within the 5-year historical range but certainly well into the top half of this range.
Last year at this time, natural gas in storage was above the 5-year historical range. Net injections into storage were “more then expected” and a late start to the winter heating season saw natural gas approach its physical storage capacity of ~4,000 BCF.
Basic numbers would suggest that if net increases were on average 70 Bcf, the US would reach its physical storage capacity around in 6-7 weeks in late November, early December. The winter heating season officially starts on November 1st, and last year’s “late start” was November 10th. The bottom line here is there is low risk of natural gas hitting storage capacity, and high probability that the winter heating season (late or not) would begin to reduce net injections and subsequently draw down on inventories.
And as stated many times before, shale gas production should not be cut but increased, along with the increased usage of natural gas within our transportation and power generation networks.
