FERC staff: US winter gas supplies adequate

The US market for natural gas approaches the winter of 2013-14 adequately supplied, according to the Federal Energy Regulatory Commission staff.

In its winter market assessment, the FERC staff sees moderate prices, adequate inventories, and growing production.

Weather, as always, will drive gas demand and price. The National Oceanic and Atmospheric Administration (NOAA) forecasts a normal winter over the large consuming region of the eastern US. The FERC staff expects residential and commercial gas demand to be comparable to last year’s levels, particularly in the Northeast.

“However, there is a high degree of uncertainty associated with this forecast since NOAA’s earlier expectation of an El Nino event this winter is on hold,” the staff report said. It added that chances are waning of an El Nino event strong enough to affect winter weather.

Average year-to-date gas prices derived from ICE futures data across the US are up 40-50% from last year but remain well below historic highs. The FERC staff doesn’t expect prices to increase much this winter, except for localized spikes in New England as temperatures fall.

Supply sufficient

The FERC staff expects current production and storage levels to be sufficient to meet winter heating demand load this winter in all regions.

“Total US natural gas supply, specifically natural gas production plus LNG and Canadian imports, is up less than 1% year-to-date, while natural gas in storage is down 4%,” the report said.

US gas production has increased 1.6% year-to-date, with growing shale gas production in the Northeast. Net US gas imports from Canada decreased 7% year-to-date, and US LNG imports dropped 40% due to abundant domestic production.

“US natural gas storage inventories are more than adequate for a normal winter despite a decline from last year’s record level,” the report said, attributing the storage rebuild to a relatively mild summer.

In New England, the report said, “Closer and cheaper Marcellus shale gas has largely displaced natural gas supplied to the Northeast via pipelines from the Southeast, the Midcontinent, and Canada.”

New England’s supplies from those areas have dropped from about 12 bcfd in 2008 to less than 6 bcfd in 2013, while Northeast production has increased from 2 bcfd to more than 11 bcfd, the report said.

LNG imports are likely to remain low this winter as gas prices fail to stay at elevated levels long enough to attract cargoes.

Contact Conglin Xu at conglinx@ogjonline.com.

Related Articles

Market watch: Energy futures prices rose slightly Friday

05/06/2002 Crude oil futures prices rose slightly Friday amid lingering uncertainty about a possible disruption of Middle East supplies, although tensions in ...

Gulf of Mexico oil service sector showing signs of an upturn

05/06/2002 The Gulf of Mexico oil service sector is experiencing the signs of an upturn, analysts with Simmons & Co. International, UBS Warburg LLC, and RBC D...

OTC: Industry, national agencies need to work together to make FPSOs work in the gulf

05/06/2002 Over the coming years, the oil and gas industry will have to keep an open line of communication with national agencies such as the US Coast Guard a...

Market watch: Energy futures prices fall as Iraq lifts embargo

05/07/2002 Crude oil futures prices fell Monday after Iraq announced plans to lift a self-imposed export embargo with exports expected to resume by Wednesday.

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected