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Commodity Tracker: 5 charts to watch this week

US natural gas inventories decline by 190 Bcf with smaller withdrawals ahead

Highlights

Henry Hub futures decline

Forecast calls for 108 Bcf draw for week in progress

US gas storage inventories declined by less than 200 Bcf for the first time in a month and below-average draws appear likely in the weeks ahead, but the upcoming Henry Hub summer strip remains near $4.60/MMBtu.

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Storage fields withdrew 190 Bcf for the week ended Feb. 11, according to data released by the US Energy Information Administration on Feb. 17.

Working gas inventories decreased to 1.911 Tcf. US storage volumes now stand 404 Bcf, or 17.5%, less than the year-ago level of 2.315 Tcf and 251 Bcf, or 11.6%, less than the five-year average of 2.162 Tcf.

The withdrawal was less than the 197 Bcf draw expected by an S&P Global Platts survey of analysts. Responses to the survey ranged from a 185 Bcf to 214 Bcf withdrawal. It outpaced the five-year average of 154 Bcf but trailed last year's 227 Bcf pull in the corresponding week. That week in 2021 marked the early days of the deep freeze winter event that eventually drove the second-largest withdrawal on record.

The NYMEX Henry Hub March contract fell 14 cents to $4.58/MMBtu following the EIA's storage report release. The prompt-month contract closed at $3.22/MMBtu this day last year. The upcoming summer strip, April through October, fell about 8 cents to $4.55/MMBtu.

The South Central storage region drew 74 Bcf, the most of all five regions once again. Total Southeast demand was 6.6 Bcf/d higher than the five-year average in the month to date, driven by growing LNG demand, which is averaging 3.7 Bcf/d above the past five years, according to data by S&P Global Platts Analytics.

Even excluding LNG demand, Southeast demand is setting new records for this part of February. Residential and commercial, industrial and power are averaging a combined 21.7 Bcf/d month to date, 2.8 Bcf/d above the five-year average. Res-comm demand is leading growth at 5.6 Bcf/d, 1.4 Bcf/d above the five-year average, while power demand is averaging 9.3 Bcf/d, 1 Bcf/d above the past five years. Industrial demand has also grown, to 6.7 Bcf/d in the month to date, 390 MMcf/d above the five-year average.

Warmer weather ahead looks to slice into demand in the coming weeks. Population-weighted temperatures in the Southeast are expected to climb in the second half of the month to 58.5 degrees Fahrenheit, 7 degrees warmer than the month to date. On average, over the past five years, res-comm, industrial and power demand have fallen a combined 570 MMcf/d after Feb. 16, so demand may be set to fall through the rest of the month.

A forecast by Platts Analytics calls for a 108-Bcf draw for the week ending Feb. 18, which would measure nearly 50 Bcf below the average draw and more than 200 Bcf less than last year.