US working gas in underground storage down 18 Bcf on week: EIA

Denver — The US natural gas storage withdrawal season started one week later than normal with a below-average draw of 18 Bcf for the week ended Nov. 20 as the Henry Hub winter strip shows slight declines with demand somewhat muted for the week in progress.

US natural gas storage inventories decreased to 3.940 Tcf for the week ended Nov. 20, the US Energy Information Administration said Nov. 25. The report was issued one day earlier than normal this week to accommodate the Thanksgiving holiday in the US.

The withdrawal was less than an S&P Global Platts survey of analysts calling for a 25 Bcf pull. Responses to the survey ranged from a 4 Bcf injection to a 39 Bcf withdrawal. The build was also less than the 47 Bcf draw reported during the same week last year as well as the five-year average withdrawal of 37 Bcf, according to EIA data.

It was a reversal from the 31 Bcf injection announced for the week prior.

US supply-and-demand balances were considerably tighter during the week ended Nov. 29, with cooler weather inflating residential-commercial consumption by 9.8 Bcf/d week on week, according to Platts Analytics. Such growth was partially offset by weaker power burns due primarily higher wind generation. Higher demand also led to stronger output, with total US supply up 3.7 Bcf/d as Northeast production and net Canadian imports expanded to meet higher demand.

Storage volumes now stand 322 Bcf, or 9%, above the year-ago level of 3.618 Tcf, and 250 Bcf, or 6.8%, above the five-year average of 3.690 Tcf.

The NYMEX Henry Hub December contract shed 3.5 cents to $2.74/MMBtu in trading following the release of the weekly storage report at midday ET. The remaining winter strip — January through March — dipped 2 cents to average $2.84/MMBtu, up 17 cents from the week prior.

Natural gas prices staged a rebound this week, as cooler weather trends into early December created a bullish backdrop. Notably, the soon to be prompt January NYMEX contract reclaimed the $2.90/MMBtu level after falling to an intraday low near $2.65/MMBtu last week. Higher gas prices are in line with the Platts Analytics forecast, which calls for winter 2020-21 Henry Hub prices to average near $3.20/MMBtu should weather normalize.

S&P Global Platts Analytics' supply-and-demand model currently forecasts a 17 Bcf withdrawal for the week ending Nov. 27, which would grow the surplus versus the five-year average by 24 Bcf as demand remains below normal because of mild weather this November. US-level rescomm estimates fell for the week in progress, largely from temperatures in the East storage region climbing from to 54 degrees from an average of 49 degrees.