Natural gas inventories are at a 10-year low following the recent brutal winter, and price increases are likely, due to potential shortages, particularly in the event of another cold winter, according to a recent article on SeekingAlpha.com.
The article connects the dots between the current low inventory and the anticipated rate of replenishment and detects a problem. To avoid an “adverse spike in gas prices” and return the inventory to the necessary 3,500 billion cubic feet by November, producers would have to add an average of 83 billion cubic feet of gas to storage for 32 weeks, but that rate might not be attainable. In 2013, producers added to inventory at a rate of only 70 billion cubic feet per week.