Gas prices in the US are showing signs of recovery after hitting lows earlier this year. In the run up to winter gas has doubled in price and the record levels of underground stocks are expected to be drawn from.
Low demand and prices mean the gas level stocks have built to a record high of 3.93ton per cubic feet, which is just below the maximum capacity of 4tn cu ft. Supplies are starting to be eaten into as winter heating ramps up. Last week 18bn cu ft of gas was pulled as people began to switch on their heating, as reported by the US Department of Energy.
Gas prices rose to $3.807 per m British thermal units (mBtu) after reaching a low of $2 mBtu in April this year, the lowest in a decade. The dramatic price fall caused a slowdown in the output growth and the number of rigs drilling for gas in the US halved this year, causing the slowest growth rate in over a year.
The US gas industry has struggled to keep a harmonious balance over supply and demand as shale gas production boomed throughout the country, creating a surplus in the underground gas supplies. Analysts have predicted that stocks will continue to steadily decline as the need for heating grows, bringing underground levels in line with historical averages.