In natural gas news, inventories continue to increase while prices continue to decrease. With an already robust natural gas supply and demand for natural gas-fired heating weak, analysts are starting to question whether there are even enough places to store U.S. inventories this year.
Normally during the winter, the demand for natural gas rises as people crank up their furnaces to combat chilly weather. And this demand normally causes inventories to shrink – substantially.
However, Mother Nature hasn’t followed that story line this year.
Instead, most of the U.S. has seen abnormally mild winter temperatures. On Friday, the forecast calls for the Northeast to thaw out from its first brief cold spell. It’ll be in the 50’s and sunny in Reno, Nev., a place that normally sees snow by now. In the Midwest, warm weather has turned frozen ponds to slush. And in southern Minnesota, most people are enjoying weather that seems more fitting for April than in January.
As a result, natural gas held in storage by companies fell just 76 billion cubic feet to 3.5 trillion cubic feet in the week ending Dec. 30, the U.S. Department of Energy reported this week. The five-year average for the week is a decline of 106 billion cubic feet.
Current inventories are their highest ever for this time of year and about 12percent above year-ago levels. Total capacity is about 4.1 trillion cubic feet, according to the most recent DOE estimate—and is about 85 percent full.
Natural gas for February delivery settled down 5.1 cents, or 1.7 percent, to $3.011 a million British thermal units on the New York Mercantile Exchange. Futures are down 15 percent since the start of December and 32 percent over the last year.
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