Year-over-year inventory deficit continues to decline despite scorching summer temperatures.
The Energy Information Administration (EIA) reported that storage operators injected 73 billion cubic feet of natural gas into storage in the week ending Aug. 19, 2011. That was in line with estimates that were calling for an injection between 72 bcf and 77 bcf, but above last year’s build of 40 bcf and the five-year average of 57 bcf.
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 five-year average fell to 146 bcf and 82 bcf, respectively. The year-over-year deficit is now at the smallest level since April.
After the report, natural gas prices rose and were last trading just under the $4/mmbtu level. Though inventories have been rapidly closing the gap with last year, prices have been unable to decisively break below that $4/mmbtu mark. That may change once we get into September and inventories approach last year’s record levels.
The weather last week was relatively mild. Cooling degree days came in at 69, below last week’s 85, as well as last year’s 85 CDDs in the same period.
In total, 87,165 GWh of electricity was generated last week, down 3.6 percent week-over-week and down 5.3 percent year-over-year, according to the Edison Electric Institute.