Yesterday’s EIA data showed natural gas is continuing to build – another 71 billion cubic feet, almost 19 per cent above the five-year average for that week. And this trend has been under way for some time:
Last week we pointed to forecasts that natural gas storage in the US could reach historic highs later this year, if demand continued to be sluggish and there were no weather events to curtail production involuntarily.
Other industry observers have raised the prospect of storage limits being reached in autumn. And this comment from US producer Chesapeake Energy suggests that may be within sight:
The company is not currently curtailing production, but may do so again later this summer or fall as market conditions dictate. The company also expects that rising pipeline and gathering system pressures during the next few months will likely result in involuntary natural gas production curtailments across the industry.
An abundance of natural gas, well into winter (FT Energy Source, 24/07/09)
US LNG imports put pressure on struggling producers (FT, 26/05/09)