U.S. natural gas withdrawals reach lowest level in seven years
The U.S. Energy Information Administration (EIA), the statistical and analytical agency within the U.S. Department of Energy, has outlined that less natural gas was withdrawn from storage this winter than in the last seven heating seasons.
According to EIA’s Weekly Natural Gas Storage Report (WNGSR), withdrawals of natural gas from U.S. underground storage facilities totalled 1,707 billion cubic feet (Bcf) during the 2022–23 heating season from 1 November 1 to 31 March – after subtracting occasional injections – which is the lowest level since the 2015–16 winter heating season.
Furthermore, working natural gas in underground storage facilities in the Lower 48 states totalled 1,830 Bcf as of 31 March 2023, after entering the heating season at a 3 per cent deficit to the five-year start-of-winter average. This exceeded the previous five-year average from 2018–22 for that time of year by 19 per cent or 294 Bcf.
Despite increased use in electric generation, the statistical and analytical agency points out that continued growth in U.S. natural gas production and reduced space heating consumption due to relatively mild winter temperatures accounted for less natural gas withdrawn this winter.
Moreover, the 2022-23 winter heating season was characterised by disparate regional weather patterns while mild temperatures lessened heating demand, especially in the residential and commercial sectors. In line with this, the heating degree days (HDD), a temperature-based indicator of heating demand, were 6 per cent below normal in the Lower 48 states.
Based on the Energy Information Administration’s statement, the data from S&P Global Commodity Insights shows that the U.S. natural gas production increased 5.5 per cent (5.2 Bcf per day) compared with last winter, outpacing consumption growth. During the same period, U.S. natural gas consumption increased 1.7 per cent (1.6 Bcf/d), driven by a 9 per cent increase in consumption to generate electric power.
“Colder temperatures and more heating demand left working natural gas stocks in the Pacific storage region 57 per cent lower than the five-year average at 73 Bcf, a record low. HDDs were 23 per cent above normal in the Pacific region and 12 per cent above normal in the mountain region,” concluded EIA.
Recently, the agency forecasted that natural gas inventories would end the injection season (April–October) at 3.8 trillion cubic feet or 6 per cent above the five-year average.
Following OPEC+’s crude oil production cuts for 2023, the U.S. Energy Information Administration also slightly revised its forecasts, reducing OPEC production by 0.5 million b/d for the rest of 2023 and increasing the Brent crude oil spot price.