Denver — US natural gas working stocks fell by 92 Bcf last week, which was within market expectations, but more than 100 Bcf below the five-year average draw, as Henry Hub winter futures remain below $2/MMBtu.
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Storage inventories fell to 2.947 Tcf for the week ended January 17, the US Energy Information Administration reported Thursday morning.
The pull was more than an S&P Global Platts' survey of analysts calling for an 88 Bcf draw.
The withdrawal was well below the 152 Bcf pull reported during the corresponding week in 2019 as well as the five-year average draw of 194 Bcf, according to EIA data. As a result, stocks were 554 Bcf, or 23%, more than the year-ago level of 2.393 Tcf and 251 Bcf, or 9%, more than the five-year average of 2.696 Tcf.
Gas prices staged a small rebound Thursday morning after the EIA reported a slightly larger-than-expected storage withdrawal, with February Henry Hub trading 4 cents higher and the balance of the first half of 2020 trading about 2 cents higher. Mild bullishness notwithstanding, gas prices continue to sell off as weather forecasts anticipate continued mild weather in the near term, against the backdrop of a structurally loose supply-demand balance in the longer term. February Henry Hub sank to a low of just $1.89/MMBtu Tuesday, nearly 30 cents lower from a week before.
WEEK IN PROGRESS
A forecast by S&P Global Platts Analytics' supply and demand model calls for a much larger draw of 193 Bcf for the week ending January 24, which would decrease the surplus to the five-year average by 50 Bcf.
The US has finally seen some real gains in demand this week as lower temperatures across the eastern half of the county have helped drive a more-than-18 Bcf/d increase in total demand compared with the week that ended January 17. Total demand is averaging 124.6 Bcf/d. More than half the gains occurred in the Northeast, where consumption has risen almost 11 Bcf/d week on week.
Upstream, supplies have grown as well, but to a much lesser degree, rising 1.3 Bcf/d on the week, according to Platts Analytics. Embedded within the change are several large movements among individual aspects of supply. Onshore production has fallen by 1.5 Bcf/d week on week, much of which is coming from a dip in Texas. The decline in domestic supply has been offset, though, by a nearly 2 Bcf/d rise in net Canadian imports.
Platts Analytics' currently expects the heating season to finalize on March 31 with 2 Tcf remaining in storage, exactly 300 Bcf more than the five-year average.