EIA reports net withdrawal for first time since 2006 due to natural gas spike
The U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report found a rare occurrence on Monday, as two energy regions reported the first July net natural gas withdrawals in approximately 10 years.
Net withdrawals are a process by which fuel is withdrawn from energy storage facilities due to low supply. The EIA study revealed that despite natural gas inventory levels being unusually high at the beginning of the season, production rates were lower than last year. The first week of August exhibited very low production levels, and a subsequent withdrawal was not unforeseeable.
The South Central and Pacific regions both reported net withdrawals for the week ending July 29, which offset the small injections reported in the other three regions. Injection season is typically between April 1 and October 31 each year, but net withdrawals in July are not uncommon.
The EIA found that when inventory levels are high, there is often a high power burn that is less efficient than when inventory levels are lower. Coupled with low production, the South Central regularly exhibits withdrawals. As a result, the region often stores natural gas in salt-dome facilities to better preserve inventory.
The report found that the total national inventory is still healthy at 3,288 billion cubic feet and remains 16 percent high than the five-year average from 2011 to 2015.
