Natural gas storage in the United States declined recently but is still about 8.5% above the five-year average for this time of year, the government reports. Average household natural gas expenditures this winter are expected to show an increase of about 7% compared with last winter.
The Energy Department’s Energy Information Administration (EIA) reported that natural gas inventories in the lower 48 states fell by 146 billion cubic feet to more than 3.29 trillion cubic feet for the week ending Dec. 7, mainly because of colder weather across the northern part of the country.
The inventory level had been well above the five-year average of about 3.04 trillion cubic feet in underground storage, and slightly ahead of last year’s storage level of 3.26 trillion cubic feet. This high level of storage going into the heart of the winter, combined with limited remaining fuel switching capability, has insulated the natural gas market from the impact of the recent price increases in petroleum markets to some extent, the EIA believes.
The Henry Hub natural gas spot price is expected to average about $7.21 per thousand cubic feet (mcf) in 2007 and $7.78 per mcf in 2008.