Natural gas storage inventories decreased 161 Bcf for the week ending December 20, according to the EIA’s weekly report. This was above the market expectation, which was a draw of 155 Bcf.

Working gas storage inventories now sit at 3.250 Tcf, which is 518 Bcf above inventories from the same time last year and 69 Bcf below the five-year average.

Prior to the storage report release, the January 2020 contract was trading at $2.185/MMBtu, roughly $0.109 below yesterday’s close. After the release of the report, the January 2020 contract was trading at $2.190/MMBtu.

Temperatures have been well above average over the last week and will continue to be above average through the remainder of 2019. Current forecasts show temperatures dropping in January; however, they will still be warmer than normal during the first part of the month. January prices have traded between $2.247 and $2.320 this week, before falling below $2.20 pre-storage report this morning. Going forward, price strength will continue to be reliant upon changes in the weather forecast to show below average temperatures.

See the chart below for projections of the end-of-season storage inventories as of April 1, 2020, 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 December 27.



Total supply remained relatively flat, while total demand decreased 16.67 Bcf/d week over week. With a decrease in demand and little change in supply, expect the EIA to report a weaker draw next week. The ICE Financial Weekly Index report is currently expecting a draw of 61 Bcf. Last year, the same week saw a draw of 20 Bcf; the five-year average is a draw of 104 Bcf.

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