Lehman Brothers analyst Thomas Driscoll expects the Department of Energy’s natural gas storage report on Wednesday to show a withdrawal during the week of Christmas of 122 Bcf — down from 123 Bcf in the same period last year and well off the five-year average of 161 Bcf. If the estimate is correct, Driscoll noted that gas inventory levels would stand at 2,577 Bcf, 160 Bcf higher than last year and 36 Bcf higher than the five-year average.

In a report issued Tuesday, Driscoll noted that adjusted heating degree days (HDD) totaled 184 last week, which indicates that heating demand decreased about 34 Bcf last week versus the prior week — which had a storage draw of 151 Bcf — and that the storage withdrawal fell 29 Bcf to 122 Bcf. To date, the weather has been about 8% warmer than a year ago and 8% warmer than the 30-year norm, Driscoll said. The Lehman analyst noted that the HDD numbers were adjusted to account for a 39-hour difference between the periods covered by the National Oceanic and Atmospheric Administration.

Driscoll said that for the past four weeks, storage withdrawals have averaged 16.9 Bcf/d, compared with a five-year average withdrawal of 10.9 Bcf/d. “More severe weather versus the five-year average increased this year’s demand over the past four weeks by an estimated 2.4 Bcf/d and increased storage withdrawals by the same amount. Without this more severe weather, storage withdrawals would have been 13.9 Bcf/d for the last four weeks, 3 Bcf/d stronger than the five-year average.”

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