HOUSTON — Natural gas storage inventories are on track to recover to normal levels by early 2015 after reserves hit decade-long lows during last year’s frigid winter, according to a government report.
The U.S. Energy Information Administration said Friday that the gap between the five-year average storage level had narrowed from about 1 trillion cubic to around 261 billion cubic feet. Even if this coming winter is as cold as the last, higher gas production means that natural gas storage will likely surpass last year’s inventory level’s by March, administration said.
Natural gas storage inventories usually rise over the summer months and are drawn down in the winter as the fuel is used to heat homes. Last winter, colder-than-normal weather left natural gas inventories at an 11-year low as large amounts of the gas were used for heating.
Since then, companies have been working overtime to build up inventory. Injections of natural gas into storage has exceeded the average storage rate for the past 28 weeks, and the extra gas stowed away has helped to lower the inventory gap to 261 billion cubic feet.
Injections during the summer months were hastened by relatively cool temperatures — which meant fewer people were running air conditioners and less natural gas went to generating electricity. The EIA cited data indicating that between April and October natural gas consumption was down 2 percent in the electric power sector from 2013 and 16 percent from 2012.
The EIA projected that this winter’s stocks wouldn’t fall to 2014 lows even if the winter was just as cold. Since last year, natural gas production has grown by 3.5 billion cubic feet per day, the administration said, providing a cushion of natural gas that can be directed toward storage.
The steady supply of natural gas has also depressed prices. Last year, prices spiked thanks to winter demand and falling inventories. This year, the administration said, inventory additions have been high and production continues to rise.
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