Natural gas inventory up 19% after mild winter, increased production

Working natural gas storage in the lower 48 states has risen 19% to 2,008 billion cubic feet as of March 31, from the previous five-year (2015-19) average for the end of the heating season, according to the U.S. Energy Information Administration (EIA).

The data comes from EIA’s most recent Weekly Natural Gas Storage Report. The 2019-20 heating season ran from Nov. 1, 2019, to March 31 and ended with the most working natural gas storage since the 2016-2017 winter, with 1,718 billion cubic feet in net withdrawals, the least in four winters.

The continued rise in natural gas production and mild winter temperatures contributed to the higher inventory levels.

Working U.S. natural gas stocks started the heating season at 3,575 billion cubic feet, nearly the same as the average over the past five years. The 2019-20 heating season had periods of warmer-than-normal temperatures. Heating degree days, a temperature-based indicator of heating demand, were 10% less this winter than the 30-year average (1981-2010) and were higher than normal for only one week in November during this heating season.

Total working gas inventory is expected to remain higher than the previous five-year average through the 2020 refill season (April 1 to Oct. 31). Natural gas production is projected to fall this summer, from levels over the same period in 2019. The decline, combined with growth in natural gas exports, is expected to contribute to smaller net injections in working gas storage through the refill season.

Inventories are expected to be 3,904 billion cubic feet by the end of the 2020 refill season, or 185 billion cubic feet more than the previous five-year average and 252 billion cubic feet more than last year. The EIA noted its projections are subject to heightened uncertainty because of the economic slowdown and significant recent change in energy markets.