Gas in U.S. storage is expected to total about 3.45 trillion cubic feet as of Nov. 1
futuresource.quote.com
By Christine Buurma
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Healthy levels of natural gas have been stored up for
U.S. heating needs, enough for even a colder-than-average winter, analysts and
traders said Wednesday.
Gas in U.S. storage is expected to total about 3.45 trillion cubic feet as of
Nov. 1, the unofficial start of the winter heating season, according to a Dow
Jones Newswires survey of 10 analysts and traders. The predicted total
surpasses the five-year average storage level on Nov. 1 of 3.327 tcf, but falls
short of last year's record 3.535 tcf.
The supply level "should facilitate a winter that's even colder than normal
by 4% or 5%," said Jim Ritterbusch, a private energy analyst in Galena, Ill.
The U.S. Energy Information Administration predicts that gas in storage as of
Nov. 1 will total 3.373 tcf, or 1.5% above the five-year average. Gas in U.S.
storage totaled 3.198 tcf as of Oct. 3.
Meanwhile, the National Weather Service is forecasting warmer-than-normal
temperatures across most of the U.S. in November, December and January. WSI
Corp., an Andover, Mass., private forecaster, also sees warmer-than-normal
temperatures in the Northeast and Midwest - major gas-consuming regions - in
November, though mostly below-normal temperatures are expected in December.
However, AccuWeather.com forecaster Joe Bastardi was calling for one of the
coldest winters in several years across much of the eastern half of the U.S.
Ample storage levels mean supply constraints are unlikely in the absence of a
prolonged stretch of extremely cold weather, said Kyle Cooper, an analyst with
IAF Advisors, a Houston-based energy advisory firm.
"It would have to be very, very cold," Cooper said. "We'll have a pretty good
cushion, especially when you consider the gas that's flowing from onshore
basins."
Onshore U.S. gas production, especially from shale formations, has grown
robustly this year, leading to large injections of gas into storage. The EIA
predicted in its October Short-Term Energy Outlook that total marketed natural
gas production in the U.S. would increase by 6.7% in 2008 and 4.2% in 2009.
Although producers including Chesapeake Energy Corp. (CHK), Petrohawk Energy
(HK) and others have cut back on drilling amid falling natural gas prices,
supplies are expected to remain sufficient throughout 2008, keeping the
pressure on prices, analysts said. Natural gas for November delivery on the New
York Mercantile Exchange settled floor trading Wednesday at $6.592/MMBtu, 52%
below the July 2 high of $13.694/MMBtu.
Economic weakness could curb industrial demand for natural gas, helping leave
more-than-adequate supplies of gas in storage, said Guy Gleichmann, the
president of United Strategic Investors Group, a brokerage based in Hollywood,
Fla.
"Historically, we haven't had such a weak environment for demand," he said.
-By Christine Buurma, Dow Jones Newswires; 201-938-2061;
christine.buurma@dowjones.com
Corrected Wednesday, October 15, 2008 18:10 ET (22:10 GMT)
(END) Dow Jones Newswires |
