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Natural gas storage injections exceed five-year average

Published by , Editorial Assistant
Tanks and Terminals,

Working natural gas inventories totaled 2930 billion ft3 in the Lower 48 states as of 7 July 2023, according to the EIA's Weekly Natural Gas Storage Report. US natural gas production has outpaced demand, resulting in more natural gas injected into storage midway through the 2023 refill season (1 April – 31 October 2023). Since 1 April 2023, net injections into natural gas storage have exceeded the five-year (2018 – 2022) average by 6% (66 billion ft3), and working natural gas inventories have reached 69% of working gas capacity so far this refill season.

The increased surplus of working natural gas inventory has reduced natural gas prices during 1H23. During Summer 2022, large deficits to the five-year average contributed to high natural gas prices, and the daily near-month futures price rose above US$9.00/million British thermal units (Btu) on several occasions.

When the deficit to the five-year average eased late in Summer 2022, prices began to fall. Working natural gas stocks have been at a surplus to the five-year average since January 2023. This surplus reached a high in March 2023 and has remained above average since the start of refill season in April 2023. Prices began to decline in January from an average of US$5.53/milion Btu in December 2022, and have averaged below US$2.50/million Btu since February 2023.

In the June Short-Term Energy Outlook, the EIA forecasts that storage injections will slow because of relatively flat natural gas production and increased natural gas use in the electric power sector to meet cooling demand for the remainder of the summer. Nevertheless, the EIA expects working natural gas inventories to remain above the five-year average for the rest of the year.

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