U.S. Gas Glut May Have Grown 10 Times More Than It Usually DoesBy
Mild weather in U.S. has crimped demand for the heating fuel
Gas stockpiles hit a record high in the week ended Nov. 4
America’s natural gas glut probably grew by 30 billion cubic feet last week. For context, consider the usual gain for this time of year: 3 billion.
Based on the average of forecasts compiled by Bloomberg on Wednesday, U.S. inventories will reach 4.047 trillion, extending an all-time high that was hit a week earlier.
Thank this month’s mild weather for the swelling supplies. Warmer-than-usual temperatures have curbed demand for the heating fuel, forcing prices to plunge. Earlier this month, gas futures capped their biggest one-week drop since January. And without a long, deep winter chill, the gas flowing out of U.S. shale reservoirs only stands to keep the glut going, putting pressure on prices well into next year.
“Storage levels have been pushed into record territory, and we’ve still got a lot of wood to chop in terms of drawing down supplies,” said John Kilduff, partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Warm weather has just decimated demand.”
Gas stockpiles totaled a record 4.017 trillion as of Nov. 4, 4.9 percent above the five-year average. The U.S. Energy Information Administration’s weekly storage report is scheduled for release at 10:30 a.m. Thursday in Washington.
— With assistance by Kevin Varley