The U.S. Energy Information Administration (EIA) on Wednesday reported a withdrawal of 7 Bcf of natural gas from storage for the week ended Nov. 17. The draw proved steeper than expectations and sent Nymex natural gas futures higher.
December Nymex futures were trading marginally flat on the day at around $2.843/MMBtu ahead of the noon ET report. After the EIA print hit the screen, the contract jumped to $2.909. By 12:30 p.m. ET, the November Nymex contract was trading at $2.868, 2.2 cents above the prior day’s close.
The print week had almost 20 less heating degree days (HDD) than normal and 37 HDDs worth of demand less than a year earlier, according to analysts at Mobius Risk Group.
Before the storage report was issued, NGI modeled a 4 Bcf injection. That compares with a five-year average withdrawal of 53 Bcf and year-earlier draw of 60 Bcf.
Estimates submitted to Reuters for the week ranged from a withdrawal of 3 Bcf to an injection of 31 Bcf, with a median build of 4 Bcf. Bloomberg’s poll spanned estimates of a 9 Bcf draw to a 17 Bcf build and produced a median 3 Bcf build. The average from The Wall Street Journal’s survey was a 2 Bcf injection.
The draw for the latest week decreased inventories to 3,826 Bcf, but left a surplus of 249 Bcf to the five-year average of 3,577 Bcf and put stocks above the year-earlier level of 3,575 Bcf.
Two regions accounted for the withdrawals. The East fell by 13 Bcf and Mountain region stocks fell by 1 Bcf. The East’s draw surprised some analysts, who pointed to a power generation shift from coal to gas as a possible factor.
“Miss is all in the East for me,” a participant said on the online platform Enelyst. “Makes sense with the HDDs and coal’s share drop.”
Meanwhile, Pacific inventories led gains, rising by 4 Bcf. The South Central and Midwest regions both posted 2 Bcf injections. South Central’s figure was a net 3 Bcf build in nonsalt facilities and a draw of 1 Bcf in salts. EIA noted that totals do not always equal the sum of components because of independent rounding.
Looking ahead to the next storage report, early estimates submitted to Reuters for the week ending Nov. 24 range from a withdrawal of 35 Bcf to an injection of 8 Bcf, with a median decrease of 9 Bcf. That compares with a withdrawal of 80 Bcf a year earlier and a five-year average decline of 44 Bcf.
