Natural gas demand continues on a steady growth curve that will put upward pressure on natural gas prices in the coming months, a market analysis firm predicts.
A new report from energy analysts at Drillinginfo predicts that despite increased natural gas production of associated gas from America’s shale plays, the 2018 injection season will end with inventories at near record low levels.
“Although large increases in overall U.S. production have mitigated the need for large inventories, peak winter days will still require a call on storage,” predicts the report by DrillingInfo.
Persistent growth in year-on-year demand has left gas storage inventories at near record low levels as the injection season wraps up, the report states. That will lead to “increased volatility and upside risk if winter temperatures are colder than normal.”
Total domestic gas in storage was pegged at 3.3 trillion cubic feet on Nov. 1, the report notes, a level not seen since the end of the injection season in 2010.
Demand for gas from the three primary user segments, industrial, residential-commercial and power, is projected to average 73.28 Bcf/d for the year. Next year, demand is expected to climb to 73.89 Bcf/d and prices to average between $2.60 and $2.75 per MMBtu, the DrillingInfo report notes.