Analysts are predicting that the Energy Information Agency will report another large injection of natural gas into storage tomorrow. Estimates were as high as 76 BCF and as low as 54 BCF. If the median estimate of 67 BCF is accurate, then we will be close to the historically high levels we saw last fall. A year ago the build was 29 BCF.
After nearly two months of large injections, total natural gas in storage is about 10% higher than the five year average. Bloated supply is attributed to the moderate weather, and demand destruction due to the economy. In addition, there is heavy onshore production activity as a result of producers needing to drill to lock in leases in shale formations throughout the country. Lots of money was spent to secure leases in the years leading up to the crash, and rather than lose the lease rights producers figure they might as well drill.