Natural gas storage declines in September

Natural gas inventories in the lower 48 states have fallen since April to a level lower than they were in the same period in 2016, but they continue to be higher than the five-year average, according to the U.S. Energy Information Administration. Natural gas storage was 127 billion cubic feet lower in the week ending Sept. 22, than in the same week in 2016, but 41 billion cubic feet higher than the five-year average.

Natural gas storage usually falls in the winter heating season, between November and March, and rises in the injection season, April through October. “Natural gas inventories were relatively high going into the 2017 injection season because warmer-than-normal winter temperatures reduced last winter’s demand for heating in homes and buildings,” according to the EIA. “This resulted in lower-than-normal natural gas withdrawals from storage this past winter and led to the first-ever net injection in the month of February.”

In summer 2017, the amount of natural gas injections was similar to the previous summer. “The summer of 2016 followed a historically warm winter, so natural gas storage levels began the season at record-high levels for that time of year,” according to the EIA. “Natural gas demand in the power sector also reached record levels, and less gas was injected into storage.”

Natural gas demand in the power sector was lower in summer 2017, than in the previous summer. “More natural gas is being exported by pipeline and ship,” according to the EIA. Also, natural gas production was flat for most of the summer but has started to increase recently. “In September, storage injections have been relatively high, largely because of increased production, milder weather and lower natural gas demand from the electric power sector following power outages caused by Hurricanes Harvey and Irma.”

In the lower 48 states, natural gas inventories are expected to fall 5% to 3,755 billion cubic feet by the end of October, from the same month in 2016. Inventories are projected to be about 48 billion cubic feet lower than the previous five-year average by the end of October.