Much could be made of gas storage inventories exiting winter just above 1.1 trillion cubic feet-the second-smallest spring carry in 15 years.This is even more notable given how supplies have been goosed by the emergence of shale production over the last decade and domestic output continues to climb to new records.As Morningstar analyst Dan Grunwald noted in a report last week,“Supply continues to break records as Appalachia and Permian output balloons.Yet for each new billion cubic feet produced,we see demand growing in lockstep.” Most of that demand is coining from the power sector,which saw a 15% increase in gas burns last year in response to an additional 7 giga-watts of gas-fired capacity.This summer another 6.5 GW of gas capacity will come on line,which combined with coal plant retirements almost ensures another record-breaking gas burn this summer.If all that added gas plant capacity ran at full tilt it would add another billion cubic feet to the daily demand,Grunwald said,although realistically it is more likely to add between 0.5 billion and 0.75 billion cubic feet per day if temperatures are close to normal.But if summer turns quite hot as some forecasts suggest,that “could see us entering winter again at some of the lowest [storage] levels in years,” Grunwald said-a scenario also noted by Societe Generale(SG)analyst Breanne Dougherty.
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