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Production Recovers from Freeze-Offs, Gas Draw Meets Expectation


Natural gas storage inventories decreased 204 Bcf for the week ending March 8, according to the EIA’s weekly report. This draw meets the market expectation, which was an inventory decrease of 205 Bcf.

Working gas storage inventories now sit at 1.186 Tcf, which is 359 Bcf below inventories at the same time last year and 569 Bcf below the five-year average.

At the time of this writing, the April 2019 contract was trading at $2.845/MMBtu, $0.025 above yesterday’s close of $2.820/MMBtu. However, these gains came before the storage release.

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 Bloomberg’s flow data and DI analysis for the week ending March 14, 2019.


  • Dry gas production increased 0.58 Bcf/d on the week, driven by gains in the South Central/Gulf region (+0.90 Bcf/d). Slight offsets were found in the East (-0.16 Bcf/d) and the Mountain (-0.17 Bcf/d) regions. In the South Central, Texas (+0.50 Bcf/d) and Oklahoma (+0.54 Bcf/d) bounced back from freeze-offs, offsetting the drop from the week prior.
  • Canadian net imports decreased 0.77 Bcf/d on the week. The decrease is caused by warmer weather in the US.


  • Domestic natural gas demand decreased 23.89 Bcf/d week over week. Res/Com decreased on the warmer weather, falling 17.77 Bcf/d week over week. Power and Industrial demand fell 3.96 Bcf/d and 2.16 Bcf/d, respectively.
  • LNG exports increased 0.20 Bcf/d, while Mexican exports increased 0.05 Bcf/d on the week.

Total supply is down 0.20 Bcf/d, while total demand decreased 24.80 Bcf/d week over week. With the drop in demand outpacing the drop in supply, expect the EIA to report a weaker draw next week. The ICE Financial Weekly Index report is currently expecting a draw of 48 Bcf for next week. Last year, the same week saw a draw of 86 Bcf, while the five-year average is 52 Bcf.

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