American Oil & Gas Reporter Guest Article: Winter Weather Significantly Alters Landscape for Natural Gas Prices

03/11/2014


This winter teaches an indelible lesson regarding the potential impact of weather on the natural gas market. Weather during the first four months of the withdrawal season has been the coldest in 32 years, increasing gas demand by more than 800 billion cubic feet, compared with last winter (which was within striking distance of historical norms).

In addition, weather-related well freeze-offs, slowdowns in new well completions, and increased pipeline pressures have reduced production by as much as 100 Bcf-150 Bcf. These shifts have tightened the supply/demand balance by nearly 1 trillion cubic feet–potentially requiring a withdrawal of more than 2.8 Tcf before the end of this winter–the largest withdrawal ever.

If late February weather forecasts prove accurate, by late March, the amount of natural gas in storage could be as low as 900 Bcf, which would be the lowest in more than a decade.

Excerpted from the American Oil & Gas Reporter, March 11, 2014. To read the full article, click on the PDF linked below.

PDF: Winter Weather Significantly Alters Landscape for Natural Gas Prices.pdf

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