Natural Gas Storage Posts 57 Bcf Withdrawal

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Natural gas storage inventories decreased by 57 Bcf for the week ending March 2, according to the EIA’s weekly report. The draw was roughly in line with market expectations. Natural gas prices are slightly down from yesterday’s close, with the April contract trading at $2.76 per MMBtu at the time of writing.

Today’s storage withdrawal is lower than last year’s draw of 68 Bcf and the 5-year average of 124 Bcf. Working gas storage inventories dropped to 1.63 Tcf, which is 680 Bcf below last year and 300 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.

Natural Gas Storage Posts 57 Bcf Withdrawal

This Week in Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending March. 8, 2018.

  • Supply:
    • Dry gas production is down 0.6 Bcf/d week-on-week, with most losses coming from the Rockies (-0.5 Bcf/d) due to freeze offs in the Bakken, and the Southeast (-0.1 Bcf/d).
    • Canadian imports are up 0.6 Bcf/d week-on-week due to colder weather in the East.
  • Demand:  Demand saw a week-on-week increase due to colder weather and rising heating demand, especially in the Northeast and the Midwest.
    • Domestic natural gas demand is up 5.7 Bcf/d, with ResCom (+5.6 Bcf/d) and industrial (+0.5 Bcf/d) increasing, while power demand decreased (-0.4 Bcf/d).
    • Mexico exports are flat week-on-week, while LNG exports are down 0.6 Bcf/d.
  • Total supply is down 0.3 Bcf/d, and total demand is up 6.1 Bcf/d. A higher withdrawal is expected next week, closer to 100 Bcf. Last year’s withdrawal for the same week was 53 Bcf, while the 5-year average is 87 Bcf.
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