US working natural gas volumes in underground storage falls 114 Bcf: EIA

Denver — Working gas in US storage fields fell less than expected during the final full storage week of 2020, but still more than the five-year average as winter storms drive daily draws higher for the week in progress.

Storage inventories fell 114 Bcf to 3.460 Tcf for the week ended Dec. 25 the US Energy Information Administration reported the morning of Dec. 31.

The withdrawal was below an S&P Global Platts' survey of analysts calling for a 123 Bcf pull, but the pull was stronger than the 87 Bcf draw reported during the same week last year as well as the five-year average withdrawal of 102 Bcf, according to EIA data. Storage volumes now stand 251 Bcf, or 7.8%, more than the year-ago level of 3.356 Tcf and 206 Bcf, or 6.3%, more than the five-year average of 3.254 Tcf.

The draw was well below the 152 pull reported the week prior. While temperatures fell 3 degrees in the Northeast, spurring some additional heating demand, it was offset by warmer weather that spread across the remaining US, according to S&P Global Platts Analytics.

That milder weather, coupled with softened demand in the run-up to the Christmas holiday, reduced residential-commercial and power burn demand by a combined 3.3 Bcf/d week on week.

The NYMEX Henry Hub February contract rose10 cents to $2.52/MMBtu in trading following the release of the weekly storage report. The summer strip, April through October, rose 7 cents to average $2.64/MMBtu.

Platts Analytics' supply and demand model currently forecasts a 160 Bcf withdrawal for the week ending Jan. 1, which would shrink the surplus versus the five-year average by another 46 Bcf despite the New Year's Day holiday.

LNG export demand has hit record highs during the week ending Jan. 1, averaging 11 Bcf/d. At the same time, production has also started to slide during the week in progress.

Total US production estimates fell a preliminary 1 Bcf/d day on day, falling below the 90 Bcf/d mark for the first time since Dec. 17, according to Platts Analytics. The declines were driven by sample production data dropping 100 MMcf/d to 200 MMcf/d, highly concentrated in the East Texas-Haynesville sample.

The recent declines reflected how quickly the momentum from both the Northeast and US Gulf Coast supplies have deteriorated throughout the second half of the month.