The EIA announced a 119 Bcf withdrawal for the week ended Jan. 20. The draw was slightly higher than market expectations, which average 117 Bcf with the full range of forecasts ahead of the release -102 to -135. The 119 Bcf draw is significantly lower than historical draws for this week and compares to a 202 Bcf draw reported last year. Working gas storage inventories fell to 2.798 Tcf , level only 20 Bcf below the 5-year average and 348 Bcf below last year and 5-year high. See Drillinginfo EIA’s chart below.
Natural gas prices have been very bullish all this week and are up almost 15 cents following the EIA report to $3.479 per MMBtu, at time of writing. The price gains are likely based on the longer-term picture since temperatures have been mild over the past two weeks. Temperature forecasts are still not consistent across weather models after the 5+ days; however, cooler temperatures than currently experienced are projected. Drillinginfo has been calling for a rise in prices for some months now, but the market had been trading on weather as usual during the winter months. From a fundamentals perspective, the supply and demand equation remains bullish and perhaps the market has started to realize that with January ending and only two months left of the winter season.
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