For the second week in a row, the Energy Information Administration (EIA)’s weekly natural gas storage inventory report surprised to the downside, showing a much smaller-than-expected 114 Bcf withdrawal from stocks for the week ending Dec. 25.

EIA storage Dec 25

However, natural gas market bears who were hoping to pop champagne after the EIA report were disappointed, as prices actually held fairly steady. The February Nymex futures contract was trading 4.0 cents higher day/day at $2.462/MMBtu in the minutes leading up to the EIA report. Prices slipped to $2.459 just after the EIA print hit screens and by 11 a.m. ET, the prompt month was at $2.472, up 5.0 cents from Wednesday’s close.

“Despite the bearish number, looking at price action, it looks like we can easily close above $2.51 for tonight,” said a participant on The Desk’s online energy chat Enelyst.

Others noted that the market often brushes off storage reports that include holidays, and the lack of selling means there are “dip buyers” at these price levels. “Natural gas never fails to surprise.”

Ahead of the EIA report, major surveys had been clustering around a pull in the mid-120s Bcf, though estimates ranged widely from as low as 85 Bcf to as large as 150 Bcf. A Bloomberg survey had a median pull of 126 Bcf, while a Wall Street Journal poll averaged a 129 Bcf draw. A Reuters survey produced a median of 125 Bcf. NGI pegged the pull at 124 Bcf.

Enelyst participants attributed the miss to multiple factors, including increased wind generation, the extended Christmas holiday and Covid-19.

EIA recorded an 87 Bcf draw for the similar week last year, and the five-year average is a 102 Bcf draw.

The withdrawal included a 42 Bcf decline in Midwest inventories and  a 34 Bcf decrease in East stocks, according to EIA. In the South Central, 21 Bcf was pulled from nonsalt facilities and 3 Bcf was drawn from salts.

Total working gas in storage fell to 3,460 Bcf, which is still 251 Bcf above year-ago levels and 206 Bcf above the five-year average.

With weather forecasts showing a warm pattern through mid-January, Enelyst participants said storage adequacy was no longer a concern. However, a colder weather in February and March could at least bring down storage inventories to around 1.2-1.3 Tcf, “which would be supportive.”