Market Snapshot: Canadian volumes of natural gas in storage are at the highest level on record going into the winter
Release date: 2020-11-04
Natural gas production remains relatively steady in Canada, averaging approximately 15.5 billion cubic feet per day (Bcf/d) (438 million cubic meters per day (106m3/d)) for the first seven months of 2020. Demand on the other hand is highly seasonal and increases significantly in the winter months when Canadians use more natural gas to heat their homes and businessesFootnote 1. Natural gas producers and distributors use storage to manage these demand swings and balance the market. In the spring and summer and early fall, natural gas is injected into storage while, in the late fall and winter, natural gas is withdrawn from storage. The arrival of cold temperatures in November normally marks the transition from storage injections to storage withdrawals.
At the end of October 2020, natural gas storage inventories in Canada averaged 804.6 Bcf (22.78 109m3). In western Canada, where the majority of storage facilities are located, inventories averaged 526.5 Bcf (14.91 109m3). In eastern Canada, inventories averaged 278.1 Bcf (7.87 109m3).
Figure 1. Canadian Natural Gas Storage Inventories – October 2020 Update
Source and Description
Source: S&P Global Platts, Canadian Daily Observer, 31 October 2020
Description: This figure shows an area chart of Canadian natural gas storage inventories in eastern and western Canada. It illustrates monthly average inventories from January 2015 to October 2020. Natural gas storage inventories fluctuate depending on time of year and market conditions. Storage inventories are the highest level in October 2020, compared to the five year time series.
Going into the winter season, total Canadian storage is at its highest level on record. Steady natural gas production in western Canada this summer, combined with narrow price differentialsFootnote 2 between western Canada and eastern Canada, and United States markets, resulted in below average exports and high natural gas storage injection rates in western Canada. Canadian natural gas consumers will be well supplied with natural gas for the 2020/21 winter season.
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