US natural gas in storage has risen from low to near average

3 May 2012 by Jim Fickett.

By tracking the amount of gas in storage, one can see that supply and demand are very close to being in balance. It is true that this balance is achieved via a price that is below cost, but the common perception that the amount of gas in storage demonstrates a huge glut is simply wrong.

Last week the Energy Information Administration updated natural gas statistics through February. Gas in storage, measured as months of supply (12 month average of stored amount divided by 12-month average of consumption) hit a low last November, has been rising since, and now stands near its long-term average.

This rise is mainly due to the mild winter. From the following EIA graph of un-normalized storage volume, you can see that the actual amount of gas stored has shown only seasonal variation, and no uptrend, over the last three years (despite all the exaggerated headlines about record amounts of gas in storage):

On the other hand, consumption last winter was noticeably lower than the previous year:

(For sources and background see US natural gas supply.)