US natural gas storage draw likely measures well below five-year average: survey

After a string of weekly bullish draws from US natural gas storage inventories this year, analysts expect a pull roughly less than half of last year's withdrawal for the week ended Feb. 18.

Henry Hub futures, meanwhile, are strengthening as the summer strip inches above $4.50/MMBtu.

The US Energy Information Administration is expected to report a 128 Bcf withdrawal for the week-ended Feb. 18, according to a survey of analysts by S&P Global Platts.

Responses to the survey ranged from a 107 to 143 Bcf withdrawal. The EIA plans to release its weekly storage report on Feb. 24.

A 128 Bcf withdrawal would be less than the five-year average draw of 166 Bcf and a fraction of the 324 Bcf pull reported during the corresponding week in 2021, which ranked as the second-largest storage draw of all time. It would reduce stocks to 1.783 Tcf. The deficit to last year would contract to 208 Bcf. The deficit to the five-year average would shrink to 213 Bcf.

For the first time this year to date, it's likely gas storage inventories fell by less than the historical five-year average rate. While balances were indeed looser, as demand eased up on warmer weather and production staged an impressive rebound, the primary reason for the below-normal withdrawal is that the five-year average is inflated by last year's massive draw, according to S&P Global Platts Analytics.

The week ended Feb. 18 overlaps with the historic winter weather that rocked the markets in February 2021, and resulted in the second-largest storage withdrawal on record. Were it not for that outsize value from last year, the survey average of 128 Bcf withdrawal for the week ended Feb. 18 would actually be 8 Bcf larger than the five-year average for the week.

Platts Analytics' storage model predicts a slightly larger 129 Bcf withdraw for the week ended Feb. 18.

The NYMEX Henry Hub March contract increased 5 cents $4.48/MMBtu during trading on Feb. 22. The upcoming summer strip, April through October, added 6 cents to $4.52/MMBtu

A forecast by Platts Analytics calls for a 118 Bcf draw for the week ending February 25, which would be more than five-year average pull of 98 Bcf. With an even larger draw expected for the week ending March 4, end-of-season inventories will likely land below 1.5 Tcf. The five-year average end-of-season total is higher at 1.659 Tcf.