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Natural Gas Futures Tick Lower After EIA Prints 82 Bcf Storage Withdrawal
The U.S. Energy Information Administration (EIA) on Thursday reported a withdrawal of 82 Bcf natural gas from underground storage for the week ended Jan. 13. The result proved steeper than expectations – though anemic compared to historic averages — and left already battered Nymex natural gas futures modestly lower.
“That’s quite the loose number once again,” said a participant on the online energy platform Enelyst.
The latest print followed a rare January injection of 11 Bcf reported a week earlier.
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Ahead of the 10:30 ET government report, the February Nymex gas futures contract was down 1.5 cents at $3.296/MMBtu. The prompt month ticked up to $3.306 soon after the EIA data was released.
By 11 a.m. ET, however, it was down 2.7 cents to $3.284. Futures this week are hovering around a level that is barely half of the early-winter highs.
Prior to the report, analysts had anticipated a withdrawal in the 70s Bcf.
Estimates submitted to Reuters ranged from declines of 53 Bcf to 81 Bcf, with a median of 73 Bcf. Bloomberg’s poll found analysts looking for a median pull of 75 Bcf. Withdrawal estimates spanned from 61 Bcf to 85 Bcf. A Wall Street Journal survey landed at an average draw of 72 Bcf, with responses ranging from decreases of 61 Bcf to 81 Bcf.
While the EIA result exceeded median projections, it compared bearishly with a five-year average draw of 156 Bcf and a year-earlier pull of 203 Bcf.
Analysts noted that production has been strong this month – above 100 Bcf/d – while mild weather across large swaths of the Lower 48 depleted heating demand.
“Demand has significantly underperformed,” said one analyst on Enelyst. “Essentially, the need for storage has gone way down.”
The decrease for the Jan. 13 week lowered inventories to 2,820 Bcf. That compared with the year-earlier level of 2,839 Bcf and the five-year average of 2,786 Bcf.
For the latest EIA print, the East and Midwest regions led, with each posting a pull of 38 Bcf. Mountain region inventories fell by 6 Bcf, while Pacific stocks decreased by 3 Bcf.
South Central stocks, meanwhile, increased by 2 Bcf. The result reflected a 12 Bcf injection into salts that was mostly offset by a pull of 10 Bcf from nonsalt facilities.
Looking ahead to next week, analysts are generally expecting another modest pull relative to recent years.
Early estimates for the week ending Jan. 20 submitted to Reuters ranged from withdrawals of 67 Bcf to 87 Bcf, with an average decrease of 78 Bcf. That compares with a decrease of 217 Bcf a year earlier and a five-year average decline of about 185 Bcf.
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