Utilities withdrew 91 Bcf of natural gas from storage for the week ended Jan. 20, the U.S. Energy Information Administration (EIA) reported Thursday. The draw was greater than market expectations but anemic relative to historic norms, keeping pressure on already beaten-down Nymex natural gas futures.
Just ahead of the 10:30 ET government report on Thursday, the February gas futures contract was down 19.6 cents at $2.719/MMBtu. The prompt month treaded water around $2.733 right after the EIA data was released.
By 11 a.m. ET it was down 18.7 cents to $2.728.
During the covered week – as with all of January to date – weather-driven demand proved relatively mild, while production held strong around 100 Bcf/d, minimizing the need to tap underground reserves.
Analysts at Mobius Risk Group noted that forecasts call for freezing air next week, but the breadth and duration of the coming cold remains uncertain. “Looking ahead, and considering overall storage levels, there will need to be some persistence of the upcoming cold shot for the market to change direction,” they said.
Prior to the report, analysts had anticipated a withdrawal in the low 80s Bcf.
Bloomberg’s poll found estimates spanning decreases of 76 Bcf to 91 Bcf, with a median of 82 Bcf. Responses to Reuters’ survey ranged from withdrawals of 76 Bcf to 94 Bcf, with a median decrease of 83 Bcf. The Wall Street Journal’s survey produced draw estimates from 76 Bcf to 87 Bcf and landed at an average of 82 Bcf. NGI predicted a pull of 81 Bcf.
The print for the Jan. 20 week compared bearishly with a five-year average draw of 185 Bcf and a year-earlier pull of 217 Bcf.
The decrease lowered inventories to 2,729 Bcf. That compared with the year-earlier level of 2,622 Bcf and the five-year average of 2,601 Bcf.
For the latest EIA print, the East led all regions with a pull of 40 Bcf; the Midwest followed with a draw of 36 Bcf. Mountain and Pacific region inventories each fell by 7 Bcf.
South Central stocks, meanwhile, decreased by 2 Bcf. The result reflected a 3 Bcf injection into salts that was more than offset by a pull of 5 Bcf from nonsalt facilities.
Looking ahead to the next EIA report, most analysts are expecting another weak result relative to recent history.
Early estimates submitted to Reuters for the week ending Jan. 27 ranged from withdrawals of 76 Bcf to 167 Bcf, with an average decrease of 138 Bcf. That compares with a draw of 261 Bcf during the comparable week of 2022 and a five-year average decline of 181 Bcf.
