The US Enters Winter With the Most Gas in Storage Since 2016. The Cushion Was Built by Producers Saying No

Working gas in storage in the Lower 48 states stood at 3,922 billion cubic feet when the injection season ended, according to Energy Information Administration estimates based on the November 7 storage report. That is the most at the start of a winter since 2016, and 6% above the 2019 to 2023 average. For a market that will face rising LNG exports in 2025, it is a comfortable starting position. At the end of March 2024, inventories totaled 2,282 Bcf, 25% more than a year earlier and 40% above the five-year average for that time of year.

The record-warm winter of 2023 to 2024 meant storage operators started the injection season far ahead of their targets. The final two weeks of the season, ending October 25 and November 1, saw injections above their five-year averages, a late boost that took inventories to the season's final total. The EIA notes that low prices in 2024 encouraged producers to curtail output. In 2024, several large dry gas producers in Appalachia and the Haynesville explicitly reduced production and deferred completions in response to prices that, in March, fell to their lowest inflation-adjusted level since at least 1997.

In the Northwest and western Canada, prices hit historic lows through October 2024. The EIA's November outlook forecasts withdrawals during the 2024 to 2025 heating season of 1,957 Bcf, with inventories ending winter 6% above the five-year average. For households, the EIA's Winter Fuels Outlook expects most to spend about the same or less on heating than last winter. With storage this full, the risk of a price spike from a single cold snap is lower than in recent winters.

The first is a sustained cold winter combined with production freeze-offs, of the kind seen in early 2024 when the system had to draw 326 Bcf in a single week.