Thursday, January 12, 2012

EIA: Storage -95 Bcf to 3.377 Tcf

The weekly EIA working gas in storage report showed a 95 Bcf decrease, bringing the level of gas in storage down to 3.377 Tcf.  The weekly withdrawal was considerably lower than last year (-31%) and the five year average (-26%), but it is not as terrible as it has been for the past couple of weeks (that's looking really hard for a bright side).  But with the weak withdrawal, the current storage level continues to fall behind last year (+13.4%) and the five year average (+17.0%).

With each successive week of not beating prior years, it becomes harder and harder to get storage down to a level to allow for a normal injection season in summer and fall.  At the current rate of withdrawal, unless there is a major cold snap or an extra long winter that leads to huge consumption levels, it looks like we will see storage max out in late fall.  If that happens look for production curtailments.  When the tank is full, it's full.

As in weeks before, the culprit for the weak storage numbers was warm temperatures.  Last week, temperatures averaged 4.6 degrees above last year and 4.6 degrees above the 30 year norm.

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