After soaring 19 cents Thursday to a high of $4.930 immediately after the Energy Information Administration (EIA) reported a 32 Bcf weekly storage withdrawal, which was larger than expected and larger than the five-year average, December gas futures made a sharp reversal, plummeting all the way down to $4.55 by about 1:25 p.m. EST. The December contract ended the day down 12 cents to $4.618.

The storage withdrawal was a bullish figure both relative to expectations and previous averages. In fact, the withdrawal took about 14 Bcf off the surplus compared to the five-year average, which is now at about 107 Bcf. But Tim Evans of IFR Pegasus believes it will be the exception rather than the rule, and the market apparently agrees with him.

“We think this will only prove an exception to the rule of the bearish trend, especially since this week’s temperatures are significantly warmer than a week ago,” Evans said. “We think the next report will show a 25-30 Bcf build with the comparison to a 40 Bcf five-year average withdrawal taking the surplus to a new high.

“While this data was more supportive [initially] than expected, the overall picture may still be bearish.”

Ron Barone of UBS said he’s expecting the storage surplus to last year, which now stands at 59 Bcf, to “swell above the 200 Bcf mark by early December, considering the latest temperature outlook and the [next] three withdrawal comparisons of 49, 91 and 162 Bcf.”

Working gas levels now stand at 3,155 Bcf, compared to 3,048 Bcf on average over the last five years and 3.096 Bcf at the same time last year, according to the EIA. Working gas levels in the key East Consuming Region are 1,864 Bcf, or about 16 Bcf more than the five-year average and 24 Bcf more than last year.

However, while some market experts are calling for a breakdown in December futures before it goes off the board next Tuesday, Jay Levine of Advest Inc. believes futures will remain range-bound near current levels.

“We had a major turn around today with all energy futures posting early substantial gains only to reverse with lower closes across the board,” Levine said. “But where did we start all this in December? $4.60 and $4.70 have been the two pivot points, and we’re still there.” He note that January crude ended the day at a lofty $31.80/bbl despite staging its own reversal. “We made a reversal today but does it mean anything? In my opinion, no it doesn’t.”

“I know a lot of people are waiting for the shoe to drop. There are some people expecting December natural gas to go into the $4.20s if not lower. That’s not going to happen in my mind.” He said December may fall into the $4.40s, but that’s unlikely.

“You just got your first withdrawal of the season and winter weather and withdrawals are the two keys in this short term. We got one today and it was a little bigger than most people expected. What if the weather starts getting cold all of a sudden? There are still a lot of unknowns out there. Crude also is maintaining very good levels.”

The National Weather Service’s latest six- to 10-day forecast is calling for above normal temperatures to remain across the eastern half of the country and most of Texas. Below normal temperatures are expected across the West. However, the area of expected below normal temperatures moves farther east in the eight to 14-day outlook. (see

The EIA said it intends to release its next weekly storage survey on Wednesday, Nov. 26 between noon and 12:10 p.m. EST because of the Thanksgiving holiday.

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