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With Inventories Bulging, Thanksgiving May Help Draw Down Gas Stocks

Word from natural-gas traders to the U.S. public: Eat more turkey!

Barclays Capital estimates that the millions of ovens being fired up for the holiday bird will help erode at least some of the large stockpiles of natural gas.

This year, Thanksgiving Day hosts are expected to cook a total of 46 million turkeys, according to the National Turkey Foundation. Barclays's analysts figure that this culinary event will burn up 2.35 billion cubic feet of natural gas, or 4% of all the gas that the U.S. uses on an average day.

How did Barclays arrive at that number? Analysts estimate that it takes about 125 cubic feet of gas to roast a 20-pound turkey in a gas oven, based on the energy needed to raise the temperature of the oven from room temperature to 325 degrees Fahrenheit—in line with the Food Network's recommendation.

But don't many people use electric ovens? The savvy analysts at Barclays factored that in, too. They estimate that one third of the 46 million birds will be cooked in a gas oven and that the rest will be roasted in electric ovens—some of which are fueled by gas.

Seasonality is a force in many commodity markets. For example, prices for gasoline tend to rise during summer driving season. And natural gas often becomes more costly as consumers crank up their heat.

Prices for natural-gas have dropped 23.5% so far this year, making it the worst performing commodity.

Unfortunately, Thursday's turkey-based feast is likely to do far more to broaden your waistline than to broaden natural-gas demand.

"We did this calculation as a way to put it into perspective what Thanksgiving could do to gas demand on a short time scale," said James Crandell, a natural-gas analyst with Barclays Capital.

The U.S. is swimming in natural gas, with total inventories hitting an all-time high of 3.843 trillion cubic feet in the week ending Nov. 12, according to the Energy Information Administration. That was 9.3%, or 327 billion cubic feet, higher than the five-year average.

What's more, many industrial facilities, including heavy natural-gas users like chemical companies, will be closed for the holiday. That will more than offset the additional gas going into the ovens, Mr. Crandell says.

"It's going to take more than one Thanksgiving to put inventories back in line with their historical norms," Mr. Crandell said.

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