Natural Gas Storage Deficit — Winter Premium
Natural gas storage (measured weekly by the EIA in the US) is the critical short-term supply buffer between production and consumption.
Winter demand peaks require drawing down summer injections — storage levels entering November determine whether the US has sufficient buffer for a cold winter without emergency imports or demand rationing.
The winter storage deficit mechanism:
When storage is below the 5-year average, the market must price gas to incentivize demand destruction (industrial switching to oil, reduced heating) or production acceleration — both require a price premium above the "sufficient storage" equilibrium.
The sensitivity is asymmetric:
A 5% storage deficit below the 5-year average historically produces a 15-25% price premium during the November-February peak demand period.
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