Natural gas storage inventories decreased by 206 Bcf for the week ended Dec. 29, per EIA. The report came in lower than most market expectations of a withdrawal 220 Bcf. Natural gas prices went down following the EIA report and currently trading down $0.01 with the Feb2018 contract at $3.00 per MMBtu at time of writing.
Working gas storage inventories dropped to 3.126 Tcf, level 192 Bcf below last year and the 5-year average.
See chart below for projections of end-of-season storage inventories as of April 1, the end of the withdrawal season. All projections now show ending inventories on April 1 at level below 2.0 Tcf.
This Week In Fundamentals
The summary below is based on PointLogic’s flow data and DI analysis for the week ending 01/04.
• Supply: dry gas production is down 3.4 Bcf/d due to extreme cold covering most of the US casing freeze offs. Canadian imports are up 1.3 Bcf/d in order to meet peak demand in the East.
• Demand: the new year brought record cold temperatures and therefore gains in all domestic demand sectors. Res/com demand increased almost 13 Bcf/d, power is up 4.8 Bcf/d and industrial gained 1.4 Bcf/d. LNG and Mexico exports declined by 0.14 Bcf/d and 0.4 Bcf/d, respectively.
• Total supply is down 1.6 Bcf/d while total demand is up 19.7 Bcf/d. A record high storage withdrawal is expected in next week’s EIA report, higher than 300 Bcf. The largest weekly storage withdrawal ever reported was a 288 Bcf draw during the polar vortex in the week ended Jan 10, 2014.
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