Warm winter to reduce US gas usage: Survey

Local distribution companies expect a 3pc decrease in throughput from October 2018 through March 2019, according to a survey released today by the American Gas Association.

The survey also found that members of the association expect residential gas bills will be 7-11pc lower than last year in part because of warmer weather, stable prices and increased energy efficiency. The survey was part of the winter heating season outlook of the association.

The National Weather Service (NWS) expects higher-than-normal temperatures in the first quarter of 2019 for most of the country except for the east coast, where the highest probability is for temperatures near the most recent 30-year average.

Nationwide, the NWS expects heating degree days will be 3pc fewer than normal but 5pc more than last year.

Peak day natural gas consumption over the last five years has been stout, from 122 Bcf/d to 147 Bcf/d in 1 January 2018, the highest single day in history, according to the association. The effects of those cold spikes tend to wither quickly, and the last three winters have been warmer than normal.

Storage inventories will start the winter at the lowest level in five years. Data released today by the US Energy Information Administration (EIA) showed storage was about 17pc less than the five-year average for the week ending 12 October, at about 3.6 Tcf.

Salt cavern storage in the southern US that allows for more injection and withdrawal cycles could be a market stabilizer, said Richard Meyer, the association's managing director for energy analysis. Summer power generation demand prevented storage builds there this year, and inventories are 37pc less than the five-year average, according to the EIA.

Utilities have contractual rights to two-thirds of the storage in the US. AGA officials said that record US production helps to offset low storage levels. The AGA cited data showing that US production was 84.1 Bcf/d on 8 October.