America’s natural gas supply rises to a record amid muted demand

NEW YORK (Bloomberg) -- U.S. natural gas stockpiles climbed to a record last week as warm weather curtailed demand for the heating fuel, according to a U.S. government report.

Natural gas inventories rose by 54 Bcf in the week ended Nov. 4 to 4.017 Tcf, U.S. Energy Information Administration data showed Thursday. That topples the high reached last November and breaks a seven-month streak of below-average storage gains.

Gas expanded above historical levels for the first time since the spring on the back of unseasonably warm weather and an up tick in drilling in the nation’s prolific shale reserves. The warmer-than-normal start to the heating season, when consumption typically ramps up, has allowed inventories to close the gap to the five-year average, dampening prices.

"We snapped it, blew right through it," Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. "We will probably extend this all time record, it’s not a good situation."

Gas futures fell 7.3 cents, or 2.7%, to $2.617/MMbtu at 10:57 a.m. in New York. Prices are down about 13% this month.

The storage gain beat analysts’ estimates that called for an increase of 51 billion for the week and the five-year average increase of 38 billion.

"This will be a headwind moving forward," Yawger said. "I don’t have any weather in my forecast; I don’t see any place in a deep freeze."