Despite most industry expectations looking for a natural gas storage withdrawal between 135 Bcf and 145 Bcf, it appeared that some traders were expecting an even larger number as the 147 Bcf pull for the week ended Dec. 19 pushed near-month natural gas futures values temporarily lower before they rallied Wednesday afternoon. In the shortened trading session, the January contract went on to close at $5.910, up 17.3 cents from Tuesday’s finish.

Prior to the noon EST report from the Energy information Administration (EIA), the January contract was making a run higher. After trading at $5.639 just before the release, the prompt-month contract knee-jerked to a $5.541 low before rebounding once again. Less than 10 minutes after the report’s release, the contract was trading at $5.728. Special attention was also being paid to the February contract, which will become the front-month contract after the regular session close on Monday. The February contract closed at $5.919, up 13.7 cents from Tuesday.

“The withdrawal was a little bit larger than many had expected. We saw a round of short-covering Tuesday and I think we got another one [Wednesday],” said Ed Kennedy, a broker with Hencorp Becstone Futures LC in Miami. “The volume is not heavy though by any stretch of the imagination. Most of the utilities and trading desks have been on skeleton crews. That is a double-edged sword. Volume is light and could add to volatility because fewer people can push this thing around [more easily].”

Heading into the Wednesday report, which was moved up a day thanks to the Christmas holiday Thursday, a Reuters survey of 17 industry players produced a withdrawal range of 113 Bcf to 162 Bcf with an average pull expectation of 139 Bcf.

“The storage withdrawal of 147 Bcf was on the high side of consensus expectations,” said Tim Evans, an analyst with Citi Futures Perspective in New York. “The data was also supportive compared with the 132 Bcf five-year average for the date. As this was a close match with our own forecast, we don’t foresee any major adjustment to our forecast for additional supportive data in the next few reports.” Going into the report, Evans had his eye on a 145 Bcf draw.

Short-term traders viewed Tuesday’s hefty 44.3-cent advance of the January contract to $5.737 as unlikely to hold. “I think Tuesday’s rally was short-covering before the holiday,” said a New York floor trader. He added that there was nothing in the way of new fundamentals for the market to absorb, and “the volume was very low, only 40,000 contracts in the front month. With a 44-cent move, you would normally get 70,000 to 80,000 contracts. A lot of guys got caught short and it looks like traders just put it to them.”

Market technicians have gifts for both the bulls and bears. According to Walter Zimmerman of United Energy, bears can take heart because according to his calculations, there is “one more leg down to the $4.800 area as long as natgas cannot exceed the $6.095 level from here.” For the bulls he asserts that “longer term, bears have no case if natgas exceeds $6.285.”

The 147 Bcf storage pull came in just below last year’s 153 Bcf withdrawal for the week, but was larger than the 132 Bcf five-year average drain on supplies.

According to the EIA, working gas in storage stood at 3,020 Bcf as Dec. 19. Stocks are now 35 Bcf less than last year at this time and 99 Bcf above the five-year average of 2,921 Bcf. The East region removed 91 Bcf while the West and Producing regions withdrew 32 Bcf and 24 Bcf, respectively.

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