Despite the Christmas week’s burst of wintry cold in a number of regions of the country, only 124 Bcf was removed from underground natural gas storage, according to the Energy Information Administration, which released its latest storage report on Thursday morning. The number was some 20 Bcf below most industry expectations, which caused natural gas futures values to turn lower Thursday after riding high in pre-report trading.

Ahead of the 10:30 a.m. EST report for the week ending Dec. 25, February natural gas futures were trading at $5.801. In the minutes that immediately followed the bearish news, the prompt-month contract hit $5.510 before notching the low for the day of $5.505 just after 11:15 a.m. EST. Futures went on to close at $5.572, down 13.7 cents from Wednesday’s regular session close and 12.6 cents lower than the previous week’s finish.

Over the past few weeks industry analysts and traders have had a hard time nailing down what kind of storage draw would actually be revealed. Adding to the forecasting difficulty were challenging factors such as the holiday season, turbulent weather, vacations and plant shutdowns.

Heading into this report, Citi Futures Perspective analyst Tim Evans was expecting a 160 Bcf draw, while a Reuters survey of 22 industry players produced a draw expectation range of 134 Bcf to 171 Bcf with an average pull consensus of 150 Bcf. Even though it was still almost 20 Bcf off the actual number, Bentek Energy was one of the closest with its projected withdrawal of 140 Bcf. The number revealed Thursday morning was well below last year’s date-adjusted 144 Bcf pull for the week, but slightly larger than the five-year average draw of 120 Bcf.

“The net withdrawal of 124 Bcf for the week ended Dec. 25 was a low, bearish number, well under the consensus expectation and barely above the 120 Bcf five-year average for the period,” Evans noted. “The data implies a supply response to the cold that shifts the background supply-demand balance in a bearish direction. The storage surplus is still falling, but it looks as though the market will retain more of its inventory surplus through the current cycle of cold.”

As of Dec. 25 working gas in storage stood at 3,276 Bcf, according to EIA estimates. Stocks are still 379 Bcf higher than last year at this time and 391 Bcf above the five-year average of 2,885 Bcf. For the week the East Region withdrew 90 Bcf, while the Producing and West regions removed 23 Bcf and 11 Bcf, respectively.

Looking ahead, hefty triple-digit draws look to be the norm for at least the next few weeks. Forecaster Commodity Weather Group said the first week of the new year will be the “coldest week of winter so far” nationally and the six- to 10-day forecast calls for a greater expanse of cold for the Midwest and Plains. Further out, there may be some warming. “The 11-15 day [period] warms in the Midcontinent with mid-month pattern uncertainty,” said Matt Rogers, the forecasting firm’s president.

Even with stout withdrawals and cold weather, prices may still struggle to surpass the $6 mark; “$6 is probably pretty fully valued, and the weather looks like it will stay cold, which will be necessary to get the inventory overhead cleared up,” said Bill O’Grady, principal with Confluence Investment Management in St. Louis. He added that there were also indications that $6 gas would spur some production. “If you are in an environment where you can easily tap additional supplies at certain prices, that is not an example of a vertical supply curve, but one that is more horizontal, and [more] horizontal supply curves tend to be characteristic of range-bound markets,” he said.

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