The Gas Storage Curve

Last fall, the amount of natural gas in storage in the United States set a new five-year record. Since then it has plummeted, and it is now approaching the bottom of the average in this chart. The pattern is normal, of course. Like squirrels with their nuts, we store natural gas when it


As chart #1 illustrates, the trend over three winters has been for progressively lower supplies as the winter ended. This post suggests that less gas in storage this year is likely to combine with other factors to drive natural gas prices much higher than you might expect.

…In the last six months, that situation has reversed. This winter was unusually cold in eastern North America, so we have consumed a lot more gas than usual. Also, prices for LNG are now much higher in Europe and East Asia than in the US, so that supply is going elsewhere. And while the surge in south-central gas supply continues – mostly in Texas – production is in decline everywhere in North America except Alaska, where it is too remote to market.

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