Gas storage levels rose 28 Bcf in the week to July 23 as the increase in cooling degree-days week-on-week and the heat build-up helped to push the injection 23 Bcf lower than the week before. Higher demand in the mid-Atlantic due to significant heat helped to drive the increase. Helping to tighten inventories further was some Gulf production taken offline as a precaution ahead of Tropical Storm Bonnie.
Overall storage stands at 2,919 Bcf and the deficit to last year has widened to 104 Bcf. With continued heat into August, the deficit is expected to widen further before potentially narrowing.
Despite record heat continuing to limit the amount of gas available for storage, natural gas prices remain below $5/mmbtu as supply continues to grow. Dry gas production recovered and began building after price spikes of Katrina/Rita (2005) knocked out Gulf of Mexico production. Drillers have invested improved returns in shale technology which has further helped propel new innovation and production.
Source: EIA
