Hottest July since 1955 didn’t stop natural gas inventories from rising more than normal.
The Energy Informational Administration reported that storage operators injected 44 billion cubic feet of natural gas into storage in the week ending July 29, 2011. That was above estimates, which were calling for an injection between 34bcf and 38bcf, and above last year’s build of 29bcf and the 5-year average of 36bcf.
These injections into storage are part of the yearly cycle of natural gas supply and demand, and insufficient natural gas going into storage now can mean shortages in the future during peak demand.
After last week’s injection, the inventory deficit against last year and the 5-year average fell to 190bcf and 82bcf, respectively. The year-over-year deficit has shrunk for seven straight weeks.
After the report, natural gas prices fell and were last trading near $3.92/mmbtu, which is the lowest level since March. The fuel got hit by a double whammy; macroeconomic concerns were putting massive pressure on commodities across the board, while NG continues to grapple with its own surging production.
Last week’s weather was the hottest since 2008. Cooling degree days came in at 101, above last week’s 95, as well as last year’s 93 CDDs in the same period. There were 95,427 GWh of electricity generated last week, down 1.7 percent week-over-week, but up 4 percent year-over-year, according to the Edison Electrical Institute. Indeed, preliminary indications are that this past July was the hottest since 1955.