The U.S. Energy Information Administration (EIA) reported a paltry 21 Bcf withdrawal from natural gas storage inventories for the week ending Dec. 2.
The draw was light compared with historical pulls and came in on the lower end of a wide 52 Bcf-range of expectations ahead of the report. However, futures traders appeared to brush off those bearish stats and instead sent prices higher in the minutes after the report was published.
The January Nymex gas futures contract, already about 18 cents higher at $5.905/MMBtu early Thursday, jumped another 7 cents to $5.976 as the EIA print crossed trading desks. By 11 a.m. ET, the prompt month had started to lose momentum and traded at $5.845, up 12.2 cents from Wednesday’s close.
The EIA’s 21 Bcf withdrawal compared with a 59 Bcf pull during the same week a year ago and a five-year average decrease of 49 Bcf.
“Overall, this number continues the loose theme,” said Enelyst’s Het Shah, managing director of the online energy chat. He said the data was 4 Bcf loose year/year when adjusted for weather.
Broken down by region, the South Central region posted a stout 10 Bcf net injection that included a 13 Bcf build in salt facilities and a 3 Bcf withdrawal from nonsalts, EIA said. Midwest stocks declined by 12 Bcf, and the Pacific pulled out 9 Bcf. East inventories slipped only 6 Bcf, while Mountain stocks fell 4 Bcf.
Several market observers on Enelyst noted that the Midwest and South Central regions were big misses for the reference period. A bit of Thanksgiving holiday hangover, warmth in the Midwest and missing storage data all likely contributed to the miss, they said.
Total working gas in storage fell to 3,462 Bcf, trimming the deficit to 51 Bcf below year-earlier levels and 58 Bcf below the five-year average, according to EIA.
Looking ahead to next week, Enelyst participants were looking for a withdrawal in the low to mid-40 Bcf range. That would compare with a 93 Bcf decline in inventories during the similar week last year and an 83 Bcf five-year average decline.
Shah noted that lower production because of pipeline maintenance and a huge drop in wind generation, along with a decline in solar generation, likely drove gas demand higher by 3.0 Bcf/d this week.
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