US natural gas storage fields post largest draw of season at 268 Bcf: EIA

Natural gas storage fields across the US posted the largest weekly draw of the heating season as more massive pulls loom on a frigid outlook.

Storage fields withdrew 268 Bcf for the week ended Jan. 28, according to data the US Energy Information Administration released Feb. 3.

It was below the 274 Bcf draw expected by an S&P Global Platts survey of analysts, but well within market expectations. The drawdown outpaced the five-year average of 150 Bcf and last year's 183 Bcf pull in the corresponding week.

Working gas inventories decreased to 2.323 Tcf. US storage volumes now stand at 393 Bcf, or 14.5%, below the year-ago level of 2.716 Tcf and 143 Bcf, or 6%, below the five-year average of 2.466 Tcf.

The South-Central region, which pulled 101 Bcf from storage during the week, led the massive draw. It was the largest amount pulled from storage in the region since last February's deep freeze.

The NYMEX Henry Hub March contract shed 57 cents to $4.92/MMBtu in trading following the release of the EIA report. The decline followed a massive price spike that sent the prompt month to a 14-year high to close at $6.26/MMBtu Jan. 27. Prices remain extremely elevated as the prompt month at this time a year ago was well below $3/MMBtu.

A Platts Analytics forecast calls for a 209 Bcf draw for the week ending Feb. 4 with another 200 Bcf-plus pull expected the following week. These withdrawals look to expand the deficit to the five-year average by more than 100 Bcf.

The current winter storm is prompting a demand surge while also affecting onshore production volumes through wellhead freeze-offs. Total Texas production has dropped to an average of just 22.3 Bcf/d for Feb. 3 from 24.6 Bcf/d in the last week of January, with a daily decline of 1.2 Bcf/d. Driving the declines are the Permian and Haynesville, where each basin's total production fell to 12.18 Bcf/d and 13.38 Bcf/d, respectively, Feb. 3 from an average of 13.85 Bcf/d and 13.77 Bcf/d in the last week of January.

Texas demand rose 2.9 Bcf/d on the day to average 25.4 Bcf/d Feb. 3, up nearly 4 Bcf/d from the last week of January. The power sector, as well as residential-commercial demand, drove the increases, with each climbing 1.4 Bcf/d and 1.6 Bcf/d on the day to 6.6 Bcf/d and 3.9 Bcf/d, respectively. The combination of low supply and strong demand sent Henry Hub prices surging nearly $1 to $6.44/MMBtu for Gas Day 3, the strongest single-day level since the February freeze of 2021.