Bloomberg News

Gas Stockpiles May Show Smaller-Than-Average Gain, Analysts Say

April 11, 2012

U.S. natural-gas stockpiles expanded by 0.8 percent last week, less than the five-year average, adding to record levels after warm weather reduced demand, according to analyst estimates compiled by Bloomberg (DOENUSCH).

Inventories rose by 21 billion cubic feet to 2.5 trillion in the week ended April 6, based on the median of 21 estimates. The five-year average change for the week is an increase of 22 billion, according to the Energy Department, which is scheduled to release its weekly supply report tomorrow.

Gas has dropped 33 percent this year to decade lows as the surplus to the average expanded to 61 percent in the week ended March 31, the biggest gap since April 2006, department data show. Stockpiles last week totaled 2.479 trillion.

“I see a bearish reaction to the report,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting firm, who estimated stocks gained 23 billion cubic feet.

U.S. heating demand was 28 percent below normal for the week ended April 7, according to Weather Derivatives. The Belton, Missouri-forecaster predicted demand would be 36 percent below normal through April 18.

Winter in the lower 48 states was the warmest since 2000, the National Climatic Data Center in Asheville, North Carolina, said March 7.

Record Production

U.S. gas production reached record levels in 2011 on increased output from shale formations from Pennsylvania to Texas. Output gained 0.8 percent in January to 83.17 billion cubic feet a day from December, the Energy Department said in its EIA-914 report March 29.

About 51 percent of U.S. households use natural gas for heating, according to the department.

Gas consumption in the U.S. declines after the winter heating season ends and before hot weather boosts consumption by power plants to run air conditioners.

The analysts’ stockpile estimates ranged from gains of 13 billion cubic feet to 41 billion.

Natural gas futures last week dropped 3.7 cents, or 1.7 percent, to $2.089 per million British thermal units on the New York Mercantile Exchange. Gas fell today to $1.984, the lowest settlement since January 2002.

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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