Working natural gas in storage rose to 1,624 Bcf as of Friday, March 25, according to EIA’s WNGSR (see Storage Figure). After a 12-Bcf injection, the first injection of 2011, stocks are now 68 Bcf above the 5-year average. This marks the sixth week in a row of either lower draws or higher injections than average. Stocks remain 12 Bcf below last year, however, after matching last year’s injection for the same week.
The injection last week was entirely the result of a significant stock build in the Producing Region. The 25 Bcf injection in the Producing Region was partly offset by draws of 7 Bcf and 6 Bcf in the East and West Regions respectively. It is normal for the Producing Region to see consistent stock builds in March while the East Region will usually continue to draw into the start of April, especially if cold weather continues. The West Region actually had a small injection the week before, but unusually cold weather in parts of the region was responsible for the latest draw.
Temperatures in the lower 48 States during the week ending March 24 were about 3 degrees warmer than normal and nearly equal to last year. The National Weather Service’s degree-day data show that the temperature in the lower 48 States last week averaged 49.1 degrees (see Temperature Maps and Data). There were extremely large regional differences. The East South Central and West South Central Regions were about 9 and 10 degrees above normal respectively while the Pacific Region experienced weather about 6 degrees below normal.
Other Market Trends
Natural Gas Production Remains Robust in January. On March 29, EIA released the Natural Gas Monthly (NGM), which includes data through January 2011. According to the NGM, natural gas production hit 63.62 Bcf per day in January, the highest recorded level for the month, despite a number of well freeze-offs that occurred, causing it to fall slightly from the previous month. The January 2011 level represents an increase of 6.4 percent from the same month in 2010, and a decrease of less than 1 percent from December 2010. Total natural gas consumption rose about 5 percent from December 2010, increasing from 87.89 Bcf per day to 92.63 Bcf per day the following month. The bulk of the increase occurred in the residential and commercial sectors as homes and businesses used more natural gas for heating. Heating degree-days increased about 8 percent from the previous month and were greater than the 30-year normal for January. Consumption of natural gas for electric power generation dropped about 4 percent from December 2010, while industrial use increased about 3 percent. The average wellhead price rose from $3.85 per MMBtu in December 2010 to $3.97 per MMBtu in January, but remains below last January’s level of $5 per MMBtu.