Enverus Blog

Insights across the energy value chain

The EIA announced a 151 Bcf withdrawal for the week ended Jan. 6. The draw was slightly higher than market expectations of a draw of 144 Bcf with the full range of forecasts ahead of the release -125 to -184. The 151 Bcf draw compares to a 152 Bcf draw reported last year and the 5-year average of 168 Bcf.

Natural gas prices have been extremely volatile this week with prices losing 15 cents on Monday to gain it all back the next day. The February contract opened $0.14 cents higher this morning ahead of the release and currently trading $0.21 cents higher than yesterday to $3.44 per MMBtu, at time of writing.

Working gas storage inventories dropped to 3.16 Tcf, level 4 Bcf below the 5-year average and 363 Bcf below last year and 5-year high. See Drillinginfo EIA’s chart below.

Weekly Natural Gas Storage – 1/12/2017

Looking ahead, a storage withdrawal north of 200 Bcf is expected on next week’s EIA release following the cold temperatures saw this week and had 49 of the 50 states with snow on the ground.
The withdrawals in the following weeks are then projected to remain at 3 digits, but closer to average and definitely lower than the 200-300 Bcf draws saw last year. From a fundamentals perspective, the supply and demand picture remains bullish with weak supply and growing demand, pushing storage inventories at low levels at the end of the winter (~1.8 Tcf, compared to 2.48 Tcf last year) putting additional upward pressure on prices.

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