US natural gas resources are so abundant even amid growing LNG exports and pipeline supplies to Mexico that the government says that the
Lower 48 states will end the winter heating season with 12 percent more inventory than the previous five-year average.
Working natural gas in storage will end the 2019-2020 winter heating season from November 1 to March 31 at 1,935 billion cubic feet.
“This increase is the result of mild winter temperatures and continuing strong production,” said the Energy Information Administration in its latest short-term energy outlook.
The EIA then forecasts that net injections during the refill season from April 1 to October 31 will bring the total working gas in storage to 4,029 Bcf, which would be the largest monthly inventory level on record.
Year-over-year growth in dry natural gas production offset the growth in exports, especially of LNG, throughout 2019.
“On October 11, 2019, the total natural gas in storage surpassed the previous five-year average - an indicator of typical storage levels - for the first time since mid-2017,” added the report.
The report said it expected withdrawals from working natural gas storage to total 1,790 Bcf at the end of March 2020.
“If realized, this would be the least natural gas withdrawn during a heating season since the winter of 2015-2016, when temperatures were also mild,” said the EIA.
Injections into and withdrawals from natural gas storage balance seasonal and other fluctuations in consumption.
Natural gas demand is greatest in the winter months, when residential and commercial demand for natural gas for space heating increases.
However, natural gas consumption in the power sector is greatest in summer months, when overall electricity demand is relatively high because of air conditioning.
The EIA expects the total working natural gas in storage will exceed the previous five-year average for the remainder of 2020, despite declines in dry natural gas production, increases in natural gas consumption in the electric power sector, and increases in natural gas exports.
“Monthly natural gas production is expected to decline in 2020 from last year’s record levels as lower natural gas prices reduce incentives for natural gas-directed drilling and as lower crude oil prices reduce incentives for oil-directed drilling and associated gas production,” the report explained.