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Below 100 Bcf Withdrawal Takes Gas Prices Lower


Natural gas storage inventories decreased by 99 Bcf for the week ending Jan. 26, according to the EIA’s weekly report. The draw was slightly below expectations. Natural gas prices declined today with the March contract trading at $2.86 per MMBtu at the time of writing.

Today’s storage withdrawal parallels last year’s draw of 87 Bcf and the 5-year average of 158 Bcf. Working gas storage inventories dropped to 2.197 Tcf, which is 526 Bcf below last year and 425 Bcf below the 5-year average.

See the chart below for projections of the end-of-season storage inventories as of April 1, the end of the withdrawal season.

This Week in Fundamentals
The summary below is based on PointLogic’s flow data and DI analysis for the week ending Feb. 1, 2018.

  • Supply:

–  Dry gas production is up 0.1 Bcf/d week-on-week, with Texas (+0.2 Bcf/d), Gulf of Mexico (+0.1 Bcf/d), and Midcontinent (+0.1 Bcf/d) increasing while the Southeast (-0.3 Bcf/d) and Northeast (-0.1 Bcf/d) regions decreased.

–  Canadian imports are up slightly (+0.1 Bcf/d) week-on-week.

  • Demand:

Demand saw a modest week-on-week increase

–  Domestic natural gas demand is up 3.5 Bcf/d, with ResCom (+3.1 Bcf/d) leading the way, industrial (+0.3 Bcf/d) increasing, and power flat.

–  LNG exports are up by 0.8 Bcf/d, while Mexico exports are up by 0.1 Bcf/d.

Total supply is up 0.3 Bcf/d, and total demand is up 4.6 Bcf/d. A slightly higher withdrawal is expected next week, in the low-100s range. This draw compares with a 152 Bcf withdrawal reported last year and a 5-year average of 152.

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