In spite of the increases in demand, overall supply was up only slightly. According to BENTEK estimates, the week’s overall average total gas supply posted a 0.2 percent increase from last week’s level. Domestic weekly dry gas production increased by 0.3 percent over the previous week, putting domestic dry gas production 7.8 percent above this time last year. The slight increase in domestic production was augmented by a 1.6 percent increase in Canadian imports. Canadian imports were 2.3 percent above year-ago volumes for the same week.
Working natural gas in storage rose to 3,794 as of Friday, October 28, according to EIA’s WNGSR (see Storage Figure). This represents a 78 Bcf implied net injection. Inventories are now 17 Bcf below their year-ago levels and 201 Bcf above the 5-year (2006-2010) average. The East region injected 32 Bcf; the West, 7 Bcf; and the Producing region, 39 Bcf. The Producing region is the only one of the three regions above its year-ago levels, but all three regions remain above their 5-year average levels.
This week’s injection is more than twice as large as the five-year average injection of 35 Bcf. During the same week last year, storage inventories rose by 67 Bcf. The end of October marks the traditional end of the injection season and the beginning of the winter heating season, though often, relatively small injections continue into November. In fact, for the next two upcoming storage injection report weeks, the 5-year average is a positive number, representing a net injection.
Average temperatures in the United States for the week ending October 27 were 1.1 degrees warmer than the 30-year normal, but 3.7 degrees cooler than last year’s levels (see Temperature Maps and Data). Temperatures were a few degrees warmer than normal in most Census divisions, with the exception of the South Atlantic and the East South Central, where temperatures were 1.6 and 1.7 degrees cooler than normal, respectively.
Other Market Trends
Tennessee Pipeline Line 300 Goes Into Service. Tennessee Gas Pipeline, a subsidiary of El Paso Corporation, placed into service its Line 300 expansion project, consisting of seven looping segments in Pennsylvania and New Jersey totaling about 127 miles added onto Tennessee’s existing system. In addition, 5500 horsepower was added to the system via two new compressor stations and upgrades at seven existing stations. The project is intended to transport natural gas produced in the growing Marcellus Shale region, and it is one of many projects planned for the area to accommodate further expected increases in production. The project increases capacity by 350 MMBtu per day. As soon as the pipeline went into service, prices rose at Tennessee’s Zone 4 Line 300 pricing point, where abundance of supplies and lack of takeaway capacity had led to depressed prices. Prices at the Line 300 station rose to $3.40 per MMBtu the day it went into service, from levels in the $1–$2 per MMBtu range (falling to just 97 cents per MMBtu on October 31). The pipeline goes through Northeast Pennsylvania, through areas of robust production, including Bradford and Susquehanna Counties.