US natural gas in storage forecasts to fall by 88 Bcf: survey

Denver — US working gas in storage likely fell by less than half the five-year average last week, but fundamentals for the week in progress point to a pull of nearly 200 Bcf, which will help draw down the storage glut.

The US Energy Information Administration is expected to report an 88 Bcf withdrawal for the week ended January 17, according to a survey of analysts by S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets.

Responses to the survey ranged from draws of 75 Bcf to 98 Bcf. The EIA plans to release its weekly storage report at 10:30 am EST Thursday.

An 88 Bcf withdrawal would be less than the 152 Bcf pulled in the corresponding week last year and less than half the five-year average draw of 194 Bcf. A withdrawal within expectations would decrease stocks to 2.951 Tcf. The surplus to the five year average would expand to 255 Bcf. The draw would also be weaker than the 109 Bcf reported for the week ended January 10.

Warmer-than-normal weather in the eastern US continue to support natural gas inventories, putting pressure on prices at Henry Hub. Forecasts for this Thursday's Weekly Natural Gas Storage Report point to a withdrawal under 90 Bcf, which would be significantly below the five-year average.

Even as production momentum from the Northeast dwindles, the inventory surplus that's accumulated throughout January adds bearish risk to the remainder of the winter, according to S&P Global Platts Analytics.

The NYMEX Henry Hub balance-of-winter futures continue to test new lows. February and March futures fell by an average of 8.8 cents to $1.905/MMBtu during Tuesday afternoon trading. No futures crack the $2/MMBtu mark until June, at $2.06/MMBtu.

Platts Analytics' supply and demand model currently expects a 192 Bcf draw for the week ending January 21, which is more than the five year average of 143 Bcf.

Total US demand hit new year-to-date highs over the long weekend of 134 Bcf/d as temperatures across the US slid, and LNG feedgas reached an all-time high of 9.4 Bcf/d Tuesday. Average US temperatures fell to 33 degrees Monday, 15 degrees below last Wednesday's average, causing res-comm demand to increase nearly 20 Bcf/d to 56.3 Bcf/d Tuesday.

In addition, LNG feedgas increased over 2 Bcf/d from last week to 9.4 Bcf/d as Freeport Train 2 entered commercial service, Cameron Train 2 continued to ramp up commissioning and fog cleared at the port of Lake Charles, allowing Sabine Pass to ramp up liquefaction.

Platts Analytics' currently expects the heating season to finalize March 31 with 2 Tcf remaining in storage, exactly 300 Bcf more than the five year average.