Sunday, March 25, 2012

Gas storage - what if we have no where to put it?



What if there is no storage available in the natural gas market?

This is a real possibility with natural gas being injected back into storage earlier than normal. There was less demand for heat this winter, so the gas is not  needed and we are now at the highest levels of storage in recent history at 58% of capacity. The highest percentage of capacity was in 2009 when we hit 98.7%. This was during a year when there was less carryover in storage from the winter. If there is no storage available, then there will have to be production shutdowns, or in the very short-run there will have to be even cheaper gas. The key will be how fast power conversion occurs between coal and natural gas. The demand increases will be the only stabilizer to the price declines.

No comments: