Gas Profit at 7-Year Low Reduces Storage Growth: Energy Markets

The returns for buying natural gas this spring and selling it for use next winter have dropped to the lowest level in seven years, discouraging companies from building new storage sites in the U.S. and threatening to put excess supplies on the market.

Buying gas for April delivery and selling more expensive November futures yielded 35.7 cents per million British thermal units yesterday on the New York Mercantile Exchange, the lowest premium for the day since 2004. The gap was 72 cents a year ago. Increased storage is needed to accommodate additional gas supplies as production from shale formations increases.