The natural gas market is one of constant flux. As we will explain throughout this blog, the state of natural gas changes on a weekly basis. According to the most recent industry reports, natural gas supply is up, but demand is down.
The Current State of Natural Gas in the United States
Marketed Production Levels: United States marketed natural gas production flattened in 2012 (see graph below). This is mainly in response to historically low natural gas prices. Still, production levels remain at all-time highs. Marketed natural gas production set a record high From January to July 2012, averaging 68.9 billion cubic feet per day (Bcf/d). This represented a 5.9% increase over 2011.
Storage Levels: According to the latest reports, natural gas storage levels are at 3,576 Bcf (billion cubic feet), representing historical highs. And these highs are only expected to increase by the end of October. In fact, the U.S. Energy Information Administration (EIA) estimates inventory levels will reach 3,950 Bcf, a new end-of-October record, according to EIA’s Short-Term Energy Outlook (STEO).
Current Prices: Natural gas currently sits around $2.92 per million British thermal units (MMBtu), averaging average $2.65 per MMBtu so far throughout 2012, according to EIA’s STEO.
Demand: According to the EIA, natural gas consumption declined by 5.2% last week compared to the week before. Still, natural gas demand is up 5.1% compared to the parallel week in 2011.
What this means for you: With storage levels higher than ever and prices near historic lows, homeowners using natural gas are expected to experience reduced costs this winter.
To learn more, please contact CQI Associates by calling 410-740-0667 or visit CQIAssociates.com today!
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Graph 1: U.S. Energy Information Administration, Natural Gas Monthly
Graph 2: U.S. Energy Information Administration based on Bloomberg, L.P.