The U.S. Energy Information Administration (EIA) reported a natural gas withdrawal from storage of 197 Bcf for the week ending Jan. 26, another triple-digit withdrawal and the fourth in a row, which landed at the high end of the wide range of expectations.
Ahead of the 10:30 a.m. ET government report, March Nymex futures were trading 1.2 cents up day/day at $2.112/MMBtu. After the data was released, the contract ticked higher. By around 11 a.m. ET, futures had slipped 2.1 cents to around $2.079.
The latest storage pull followed the massive 326 Bcf withdrawal reported for the prior week, which was the third largest drawdown in EIA records dating back to 2010. The two largest in recent years were a 359 Bcf pull in January 2018 and a draw of 338 Bcf in February 2021, the week of Winter Storm Uri.
NGI had modeled a pull of 190 Bcf. Estimates submitted to Reuters ranged from 166 Bcf to 207 Bcf, with a median of 199 Bcf. A Bloomberg survey drew withdrawal estimates from 183 Bcf to 209 Bcf, with a median of 202 Bcf.
The five-year average for the period is a 185 Bcf pull, while the year-ago print was a 141 Bcf withdrawal.
The draw for the latest week cut inventories to 2,659 Bcf, 130 Bcf above the five-year average and 54 Bcf higher than in the same week last year.
By region, South Central led, with a draw of 71 Bcf, which included a 49 Bcf pull from nonsalt facilities and a decrease of 21 Bcf in salts. The Midwest followed with a storage pull of 61 Bcf. The East showed a draw of 52 Bcf. Mountain stocks fell 9 Bcf, while Pacific region stocks decreased by 5 Bcf.
Next week, a modest pull is expected “that would push up the surplus to around 240 Bcf,” said East Daley analyst Jack Weixel, who was discussing the report on the online energy platform Enelyst.
Looking ahead to the week ending Friday (Feb. 2), early estimates submitted to Reuters ranged from withdrawals of 64 Bcf to 185 Bcf, with an average decrease of 86 Bcf. That compares with a withdrawal of around 208 Bcf during the same week last year and a five-year average decrease of about 193 Bcf.
Meteorologist Rhett Milne of NatgasWeather said on Enelyst that the first half of February is forecast to be one of the warmest of the past 50 years. Weather models are forecasting light national demand for the next 13 days. Demand then is expected to increase closer to seasonal averages for the Feb. 14-16 period as colder air advances into the United States, Milne said.
EBW Analytics’ Eli Rubin said the medium-term market outlook remains bearish, as the market shifts its focus from Winter Storm Gerri’s Arctic blast to an oversupplied injection season ahead.
However, Rubin said, “it will still take another four weeks to rebuild the storage surplus versus the five-year average toward 300 Bcf – and even then still remain 75-125 Bcf shy of the mammoth 399-Bcf surplus at the end of 2023.”
