U.S. gas market has eliminated storage surplus (Oil Industry News)

The U.S. gas market has tightened significantly over the last nine months as low prices have spurred strong consumption and exports while slashing drilling of new wells.

The market has rebalanced despite an unusually mild winter so far, which points to the degree of underlying tightness and suggests prices will need to remain higher in 2017 than they were in 2016 to avoid a shortage.

At the half-way point in the current winter heating season, working gas stocks in underground storage are 77 billion cubic feet (3 percent) below the five-year average. At the same point last year, stocks were 473 billion cubic feet (17 percent) above average, according to the U.S. Energy Information Administration.

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