The U.S. Energy Information Administration (EIA) on Thursday reported a natural gas withdrawal from storage of 326 Bcf for the week ended Jan. 19, the third highest on record, which landed near expectations and blew away the year-earlier decline.
Ahead of the 10:30 a.m. ET government report, February Nymex futures were trading up 6.7 cents day/day at $2.708/MMBtu. After the data was released, the contract chopped lower to around $2.680. By around 11 a.m. ET, futures were trading around $2.664, up 2.3 cents on the day.
The withdrawal follows the two largest in recent years: 359 Bcf in January 2018 and 338 Bcf in February 2021, the week of Winter Storm Uri, according to EIA records that date back to 2010.
NGI had modeled a pull of 320 Bcf. Median draw estimates for Reuters stood at 320 Bcf, with Bloomberg landing at 318 Bcf. Even though the print landed within a cluster of estimates, the weaker futures had some analysts scratching their heads.
“Looking good, but why’s everyone selling?” asked one analyst on the online energy platform Enelyst. Others pegged it to concerns that the print would surprise to the upside. “There’s the expectation, and then there’s the expectation,” another said.
The draw for the latest week cut inventories to 2,856 Bcf, slashing the surplus to the five-year average to 142 Bcf from 320 Bcf the week before. The surplus to the year-earlier level fell to 110 Bcf from 350 Bcf.
The five-year average draw was 148 Bcf, while the year-earlier decline was 86 Bcf.
Combined with the previous weekly declines of 140 Bcf, which beat expectations, and 154 Bcf, which landed short, the three straight triple-digit storage pulls reduced the year-on-year surplus to its lowest level in at least a year from a peak of 585 Bcf in late December.
By region, South Central led, with a draw of 138 Bcf. That included a 75 Bcf pull from nonsalt facilities and a decrease of 63 Bcf in salts. The pull met expectations, as last week’s freeze-offs were felt as far south as Texas.
The Midwest followed with a storage pull of 85 Bcf. The East showed a draw of 58 Bcf. Pacific stocks fell 29 Bcf, while Mountain region stocks decreased by 14 Bcf.
Looking ahead to the print for the week ending Jan. 26, unseasonably warm weather is expected to depress the drawdown, possibly below the year-ago and five-year average levels.
Early estimates submitted to Reuters ranged between withdrawals of 105 Bcf to 226 Bcf, with an average of 180 Bcf. That compares with a withdrawal of 141 Bcf a year earlier and a five-year average decrease of 185 Bcf.
NatGasWeather said the net result of weather’s whipsaw from frigid to warm could be a roundtrip for storage surpluses “increasing back to plus-320 Bcf due to the exceptionally warm Jan. 25-Feb. 6 period.”
