Natural-gas inventories in the U.S. are on track to start the winter of 2024-25 at their highest in eight years, as a mild previous winter has led to persistently high storage levels so far this year, the Energy Information Administration says.

EIA said in a note on Monday it estimates working natural gas in storage in the Lower 48 states ended the natural-gas injection season at the end of October with 3,922 Bcf, the most since October 2016.

Inventories are currently running 6% above the five-year average from 2019-23, despite less-than-average injections into storage throughout the entire injection season, which runs April 1-Oct. 30, the agency said.

According to EIA, natural gas was injected at a rate below the five-year average in nearly every week during the 2024 injection season in part because starting inventories were relatively full due to mild weather combined with excess gas supply.

The agency said U.S. natural-gas storage in the Lower 48 on March 31 at the end of the 2023-24 winter heating season was at 2,282 Bcf, which was 25% more than the year-ago level and 40% above its five-year average. The winter heating season lasts from Nov. 1 to March 31.

Energy companies in North America and Europe tend to deliver natural gas to storage between spring and fall in preparation for the highest home heating demand from November to March when the average temperatures are often the lowest.

High natural-gas stocks led to a record low price of U.S. benchmark Henry Hub gas futures at $1.50/MMBtu on Feb. 20. Most analysts expect natural-gas prices in the U.S. to stay relatively cheap during the 2024-2025 winter.

Natural gas is a major cost component for oil refineries as a heating fuel throughout the refining process. While most U.S. refineries have access to the relatively abundant domestic natural gas produced in the Permian Basin in West Texas and the Appalachian Basin in the Northeast, those in the West Coast rely mostly on imports because of a lack of gas pipeline access because of its unique terrain.


This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal. 


 
   -- Reporting by Frank Tang, ftang@opisnet.com; Editing by Michael Kelly,   mkelly@opisnet.com

(END) Dow Jones Newswires

12-02-24 1348ET