The U.S. Energy Information Administration (EIA) on Thursday reported a withdrawal of 134 Bcf from natural gas storage for the week ended Jan. 8.
The result exceeded both the year-earlier pull and the midpoint of analysts’ estimates, but it fell short of fueling Nymex natural gas futures.
It was “a stronger draw than we estimated…reflecting a tighter balance than we expected,” Bespoke Weather Services said.
Ahead of the EIA report, the February contract was up 2.6 cents at $2.753/MMBtu amid anticipation of a steep pull. The prompt month jumped to around $2.775 when the data was released; however, by 11 a.m. ET, it was up only a tenth of a cent from the prior day’s close at $2.728.
Analysts on The Desk’s online energy platform Enelyst said the muted market response reflected profit taking more than disappointment. “Overbought, that’s about all,” one participant said of futures.
Prior to the report, a Bloomberg survey found estimates ranging from withdrawals of 120 Bcf to 141 Bcf, with a median 129 Bcf decrease. NGI modeled a 130 Bcf withdrawal for this week’s report, on par with the pull reported for the week ended Jan. 1.
EIA recorded a 91 Bcf withdrawal for the comparable year-ago period, while the five-year average withdrawal is 161 Bcf, according to the agency.
Energy Aspects, which had forecasted a 128 Bcf pull, estimated a 10% week/week decline in heating demand for the covered week.
However, this was “partially offset by a return of industrial demand (up 0.8 Bcf/d week/week) and exports to Mexico (up 0.3 Bcf/d week/week) after the holiday season,” the firm said.
Robust U.S. liquefied natural gas export volumes during the covered week provided added demand. LNG volumes hovered above 11 Bcf and near record levels most of the week, NGI data show. Harsh winter conditions across northern Asia – a key destination for U.S. LNG – bolstered the demand.
The pull for the Jan. 8 week reduced inventories to 3,196 Bcf, above the year-earlier level of 3,070 Bcf and above the five-year average of 2,978 Bcf.
The Midwest and East regions led the charge with pulls of 44 Bcf and 39 Bcf, respectively, according to EIA. The South Central followed with a withdrawal of 37 Bcf that included a 31 Bcf pull from nonsalt facilities and a decrease of 6 Bcf from salts. Mountain region stocks declined by 8 Bcf, while Pacific inventories fell by 4 Bcf.
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