Thursday, June 14, 2012

EIA: Storage +67 Bcf to 2.944 Tcf

The EIA working gas in storage report showed a 67 Bcf net increase this week, bringing the total gas in storage to 2.944 Tcf.  The weekly injection was 7% below last  year (+72 Bcf) and 24% below the five year average (+88 Bcf).  The current storage level is still 31.7% above last year (2.236 Tcf) and 29.2% above the five year average (2.278 Tcf).

While it is encouraging to see weekly injections remain below average (remember the beginning of April 2012 when the storage level was 60% higher than the five year average?), the current level is still at record levels and is 666 Bcf higher than the five year average, which is already abnormally high based on heightened storage levels in recent years.  Below is the EIA's net injection/withdrawal data for the past thee months

The good news is that we will be able to hit the "reset" button in November at the end of the storage season, even if storage tops out before then.  A cold winter will further reduce storage levels and we likely will see producers inch back into gas drilling to play a game of brinkmanship for another year.  But it will be a tense five months before we get there.

Temperatures last week were generally cooler than normal, 5.0 degrees cooler than last year and 1.1 degrees cooler than last year.

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