Somethin’ Bad About to Happen? How Warm Winters Increasingly Threaten Gas Supply/Demand Balances
We enter the natural gas winter this November after a record-breaking storage season that saw 2.75 Tcf of summer surplus squirreled away into underground storage. That surplus resulted from record breaking U.S. production exceeding lower summer demand. This year a repeat of last year’s freezing winter should run down storage enough to leave room for another summer of surplus. But with U.S. production at 70 Bcf/d and northeast output up 22 percent this year to nearly 18 Bcf/d gas supplies have reached a level where anything but a cold winter will leave too much gas in the ground next March. That theoretically would leave no room to inject surplus supplies into storage next summer – threatening the balancing role that storage plays in the natural gas market. Today we explain how the gas supply demand balance is threatened by changes to the storage market.
