America’s Gas Stockpiles Drop Most on Record After Polar BlastBy
Inventories fell 359 billion cubic feet last week, EIA says
Gas consumption climbed to a record on New Year’s Day
The “bomb cyclone” that left the eastern U.S. shivering last week led to the biggest drop ever recorded for natural gas stockpiles.
Inventories of the heating fuel tumbled by 359 billion cubic feet last week, topping the previous record decline of 288 billion four years ago, government data showed. Analysts had predicted a drop of 333 billion. Gas futures rose 3.3 percent to $3.003 per million British thermal units at 10:46 a.m. on the New York Mercantile Exchange after the report.
Its been a banner time for gas demand. Total consumption of the heating and power-plant fuel climbed to a record on New Year’s Day in the lower 48 states, and the country is now a net gas exporter for the first time since the 1950s. But an extended rally may prove elusive as the arctic blast fades and output from America’s fertile shale basins surges to new highs.
“This invincibility of natural gas production seems to be called into question today with this bigger-than-expected draw,” Phil Flynn, senior market analyst at Price Futures Group Inc. In Chicago, said by phone. “The only thing that’s probably tempering the rally is it is warming up a little bit, at least in the short term.”
Though a cold spell is set to descend on the eastern half of the country next week, above-normal temperatures are expected from Texas to New York the week after, according to Radiant Solutions. The low in New York may reach 37 degrees Fahrenheit (3 Celsius) Jan. 23, 10 above normal, data from AccuWeather Inc. show.
After a record gas draw, “we’ll be able to replace it quickly as long as the weather warms up as it’s supposed to do,” Flynn said.
Inventories totaled 2.767 trillion cubic feet as of Jan. 5, 12.1 percent below the 5-year average and 13 percent below year-earlier levels, according to the Energy Information Administration.