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Rare Winter Storage Injection Fails to Fluster February Natural Gas Futures
The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 11 Bcf natural gas into underground storage for the week ended Jan. 6. The result essentially matched the most bearish of expectations, but Nymex natural gas futures forged ahead anyway.
Ahead of the 10:30 ET government report, the February futures contract was up 19.4 cents at $3.865/MMBtu amid early bargain buying.
The prompt month slid to around $3.802 when the EIA data was released. By 11 a.m. ET, however, it had regained momentum and was ahead 21.6 cents to $3.887.
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Prior to the report, Reuters’ poll as of Thursday morning found a median withdrawal estimate of 12 Bcf for the EIA week ended Jan. 6. Predictions ran from an injection of 12 Bcf to a draw of 73 Bcf. The Wall Street Journal’s survey landed at an average draw of 13 Bcf. Estimates spanned pulls of 5 Bcf to 30 Bcf.
NGI modeled a pull of 14 Bcf. That compared with a five-year average draw of more than 150 Bcf.
The injection for the Jan. 6 week boosted inventories to 2,902 Bcf. That compared with the year-earlier level of 3,042 Bcf and the five-year average of 2,942 Bcf.
“It was much warmer than normal over most of the U.S. besides the colder West and Northern Plains,” NatGasWeather said of temperatures during the EIA report period.
The results mostly mirrored the weather conditions.
The South Central reported an overall increase of 27 Bcf. This included a 25 Bcf injection into salts and a 2 Bcf addition to nonsalt facilities. East region stocks climbed by 9 Bcf.
“Yikes,” said one analyst on the online energy platform Enelyst, amplifying the sentiment of many more.
Elsewhere, inventories continued to decline, though modestly, with the Midwest posting a 16 Bcf draw. Pacific region stocks fell by 5 Bcf, according to EIA, while Mountain inventories declined by 4 Bcf.
Looking ahead to the next EIA print, analysts are looking for a draw, albeit a bearish one that would reflect ongoing mild weather in the current week.
Early estimates submitted to Reuters for the week ending Jan. 13 ranged from withdrawals of 7 Bcf to 99 Bcf, with an average of 74 Bcf. That compares with a five-year average of about 156 Bcf.
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