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Record Storage Withdrawal Expected Next Week at Over 300 Bcf


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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