US working natural gas in underground storage decreases by 151 Bcf: EIA

Denver — US natural gas in storage last week fell at a rate more than the five-year average for only the second time this year, according to data released by the US Energy Information Administration on Thursday, allowing Henry Hub futures to hang on to gains made earlier this week.

Storage inventories fell by 151 Bcf to 2.343 Tcf for the week ended February 14. The pull was more than an S&P Global Platts' survey of analysts calling for a 151 Bcf withdrawal. It was less than the 163 Bcf pull reported during the corresponding week in 2019 but more than the five-year average draw of 136 Bcf, according to EIA data. It marked only the second time the draw was more than the five-year average this year.

Storage volumes now stand 613 Bcf, or 35.4%, more than the year-ago level of 1.730 Tcf and 200 Bcf, or 9.3%, more than the five-year average of 2.143 Tcf.

Falling temperatures, mostly in the US Midwest, bumped up residential and commercial demand for natural gas 5.2 Bcf/d week over week, increasing the Lower 48's call on storage, according to S&P Global Platts Analytics. Total demand was up 6.9 Bcf/d week over week. LNG feedgas was the only demand source to decline, with volumes falling 0.9 Bcf/d. Losses were largely attributable to reduced flows into the Sabine Pass and Cameron LNG export facilities as fog and maintenance-related activities weighed on demand.

Upstream, supplies were up 1.2 Bcf/d, led by a 0.7 Bcf/d increase in onshore production volumes. Net Canadian imports were also up approximately 0.4 Bcf/d week over week.

The NYMEX Henry Hub March contract added 1.2 cents to $1.967/MMBtu in the minutes of trading following the weekly storage report. Summer 2020 prices traded at $2.09/MMBtu, an increase of 7% from the lows established last week. Further out on the curve, winter 2020-21 Henry Hub prices have seen a steady increase in support, with prices up roughly 3% relative to the lows established in early February.

A forecast by Platts Analytics' supply and demand model expects a 143 Bcf draw for the week ending February 21, which is 21 Bcf stronger than the five-year average.

The week in progress has seen balances tighten further, with demand rising by 2.7 Bcf/d and supplies falling by 0.3 Bcf/d. Most of the demand gains were linked to a 3.2 Bcf/d increase in residential and commercial consumption.

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