US natural gas inventories climb within 2.6% of capacity

05 November 2009 17:21  [Source: ICIS news]

HOUSTON (ICIS news)--US natural gas storage levels continued climbing into uncharted territory, according to an Energy Information Administration (EIA) report on Thursday that showed stocks are within 2.6% of the estimated domestic capacity.

A 29bn cubic feet (bcf) build in underground inventories during the week ended 30 October put total US stocks at 3,788 bcf compared with 3,759 bcf in the prior week, according to the EIA.

The record-high storage level crept to 97.4% of the EIA's estimated storage total of 3,889 bcf as the traditional natural gas injection season begins to wind down.

"Bottom line, we are at a record high surplus in all three market areas and we are at theoretical capacity in the west and within hailing distance of it in the Gulf of Mexico," analyst Stephen Schork wrote in his energy sector newsletter The Schork Report.

Shortly after the EIA's report, futures traders looked past the bulging natural gas stocks and put December contracts up by 11.1 cents at $4.836/MMBtu, following a prior session of steep losses.

January contracts on the NYMEX also moved higher, trading at $5.170/MMBtu, a 10.2-cent increase from Wednesday.

The 29 bcf injection last week was slightly lower than analysts' average predictions of 30 bcf.

Chemical commodity prices are dictated by natural gas values due to the fuel's wide use as a feedstock and power supply.

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By: Ryan Hickman
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