Meanwhile, gas futures refuse to exceed $5.

U.S. working gas in storage has declined to 1.001 trillion cubic feet as of March 7—the lowest level since just under 1 Tcf in May 2003—according to the Energy Information Administration’s weekly update. Yet gas futures will continue to refuse to budge, the EIA expects, despite that winter continues across the U.S., while flex-fuel power-generation plants can merely switch to coal should natural gas prices push higher.

The April contract was trading at $4.41 per million Btu—the energy equivalent of roughly 1,000 cubic feet of gas—this morning; forward months were in the $4s through 2023. The EIA estimates fuel switching would occur above low-$4 gas, keeping demand flat.

What will surprise is if reloading the storage this spring and summer to the traditional 3.5-Tcf-plus level entering this coming fall can be achieved. “(It) is physically possible,” report securities analysts with Tudor, Pickering, Holt & Co. “But injections have to be at or near record levels each week through the entire (reloading) season,” which is April through October.

“If late April/early-May injections are normal…then hitting a 3.8-Tcf storage target is unlikely, putting upward pressure on gas prices.”

Record, sustained low temperatures this winter has resulted in an average of 91.2 billion cubic feet of daily gas consumption beginning Nov. 1—10% more than last winter and 13% more than during the past five winters—the EIA reports. “Residential/commercial consumption increased by 17% over…the 2012-13 winter season, while population-weighted heating degree days—indicating cold weather—increased by 16%,” it adds, citing data from Bentek Energy LLC.

Adding 2.5 Tcf to storage in the coming months “would surpass the previous record, injection-season, net-inventory build, (which was during) 2001, by more than 90 Bcf, to end the injection season at 3.459 Tcf.

“While the projected storage build for the upcoming injection season would be a record, total Lower 48 (end-of-October) inventories in 2014 would still be at their lowest level since 2008. High injections would not fully erase the deficit in storage volumes caused by this winter's heavy withdrawals,” the EIA concludes.

Richard Hastings, macro-strategist for Global Hunter Securities LLC, notes that 195 Bcf was drawn from storage during the week ending March 7, “vastly outpacing any comparable week of historical comparisons.”

The total draw this winter “already surpasses what occurred in 2003,” he adds.

“However, there is yet a bit of time left for the season to surpass 2003, not only in a statistically normalized way but also in an actual way: If a few more cold snaps take place, then not only would end-of-season working gas decline to our new forecast of 706 Bcf but there are chances for comparisons to the 642-Bcf level hit in April 2003.”

–Nissa Darbonne, Author, The American Shales; Editor-at-Large, Oil and Gas Investor,, Oil and Gas Investor This Week, A&D Watch,, Contact Nissa at