Energy companies’ efforts to replenish the nation’s natural gas supplies by the end of the storage injection season have come up short, energy analysts said Thursday.
With the end of the injection season this week, natural gas stocks are still 8.2 percent below the five-year average despite large weekly gains, leaving some concern about whether there will be adequate supplies for the approaching winter, analysts said.
“We had heck of a comeback here,” said Phil Flynn, an energy analyst with Price Futures Group in Chicago, adding that at the end of last winter, stocks were 48 percent below the five-year average.
But, he said, “they came up a little bit short.”
Natural gas inventories rose 87 billion cubic feet to 3.48 trillion cubic feet during the week that ended Oct. 24, according to a report released Thursday by the U.S. Energy Information Administration.
“I think the concern is eased, but it remains — especially relative to the possible weather,” said Michael Lynch, president of Massachusetts based Strategic Energy and Economic Research Inc.
The annual injection season — when natural gas is stored — runs from April 1 to Nov. 1. There can also be some injections in the first weeks of November, depending on the weather.
Natural gas for December delivery was up 1.31 percent Friday to $3.88 per million British thermal units on the New York Mercantile Exchange.
Natural gas prices have softened on the market because of improved storage, said Steve Mosley, a commodity trading adviser.
He said prices tend to rally at the end of October because winter is approaching and heating demand increases. Mosley said that forecasts show a “pretty cold winter” this year.
Almost half of American households use natural gas for heating, according to the energy administration. Customers’ bills are adjusted for natural gas price changes in October.
If the United States gets another cold winter like last year, there could be some price spikes in natural gas because of storage levels, analysts said.
Last year, prices were pushed up when heating demand began to deplete supplies. In November 2013, natural gas prices averaged $3.50 per million Btu before increasing to $6.50.
“While it could be better this year, I think with supplies being a lot lower then they were a year ago, if we get a cold winter, we could see some price spikes,” Flynn said.