Natural gas market prognosticators hit the nail on the head Thursday morning as the Energy Information Administration’s (EIA) report that 190 Bcf had been withdrawn from underground storage for the week ending Feb. 12 came as no surprise. Even though the report was well forecast, March natural gas futures immediately dropped more than a dime and ended up finishing out the regular session at $5.172, down 21.4 cents from Wednesday’s close.

Leading up to the 10:30 a.m. EST report, March natural gas was trading at $5.343, but dropped in the minutes following the report to $5.230. From there the prompt-month contract continued to decline, recording a low of $5.138 before finishing out the day.

Calling the report “neutral,” Citi Futures Perspective analyst Tim Evans said not much has changed in the natural gas futures market landscape. “The 190 Bcf net withdrawal from storage for last week was right on market expectations,” he said. “It was supportive relative to the 128 Bcf five-year average for the data, but not unexpected.”

One New York broker told NGI that the “bearish slant” to the day might have been the result of some traders expecting an even larger draw. “I know what the consensus forecasts were saying, but it is possible that some were banking on an even larger pull than the one we received. Once the 190 Bcf pull was realized, I think some scrambling was triggered.”

Heading into Thursday morning’s natural gas storage report for the week ending Feb. 12, it appeared that much of the industry was looking for a withdrawal of around 190 Bcf. A Reuters survey of 23 industry players produced a withdrawal range of 150 Bcf to 208 Bcf with an average expectation of 190 Bcf. Evans said he was also expecting a 190 Bcf draw. Bentek Energy projected a withdrawal of 204 Bcf.

In a historical data comparison, Thursday’s report was bullish. The 190 Bcf draw dwarfed last year’s date-adjusted withdrawal of 43 Bcf and the five-year average withdrawal of 128 Bcf. According to EIA estimates, working gas in storage stood at 2,025 Bcf as of Feb. 12. The stout draw cut surpluses drastically. Stocks are now only 26 Bcf higher than last year at this time and 53 Bcf above the five-year average of 1,972 Bcf.

The frigid East Region led the withdrawal charge for the week by removing 105 Bcf, while the Producing and West regions withdrew 63 Bcf and 22 Bcf, respectively.

Figures show that if withdrawals for the last two weeks of February each tally around 200 Bcf, and that an additional 300 Bcf comes out of the ground during the month of March, season ending inventories would wind up just above 1,300 Bcf. Should ending inventories fall that low, a sizeable spring-early summer price advance is possible. Such advances took place in 2005 and 2008 when ending inventories were 1,284 Bcf and 1,247 Bcf, respectively.

Heading into Thursday’s report, all eyes were on the futures market. “Prices are at an important point here. On the charts, there is clear support above $5, up to $5.06,” Peter Beutel of Cameron Hanover said Thursday morning. It is his view that a “decisive” break below support would set up a bearish scenario. “After what we expect to see happen to the surpluses (against a year ago and against the five-year average) in [Thursday’s] report, it is difficult for us to believe that natural gas prices could be worth less than $5/MMBtu,” he said.

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