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Natural gas market anticipates large withdrawal from storage

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Essential Energy Insights - September 17, 2020

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Natural gas market anticipates large withdrawal from storage

The weekly natural gas inventory report to be released by the U.S. Energy Information Administration at 12 p.m. ET on Wednesday, Nov. 22, a day earlier than usual due to the Thanksgiving holiday, is expected to outline a large withdrawal from inventories for the week to Nov. 17.

Analysts and traders surveyed ahead of the release of the upcoming natural gas storage report anticipate a 48-Bcf to 63-Bcf withdrawal, with the consensus expectation being a storage withdrawal of 54 Bcf. That compares to the 2-Bcf injection reported for the corresponding week in 2016 and the 26-Bcf five-year-average withdrawal.

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Degree day data from the National Oceanic and Atmospheric Administration for the review week to Nov. 18 reflects supportive weather, outlining heating degree days that were 5.1% fewer than normal for the week but 33.0% more than the corresponding week in 2016.

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In the previous week's data, the reported net 18-Bcf withdrawal from natural gas inventories in the Lower 48 during the week ended Nov. 10 was a miss against the market consensus ahead of the report's release that called for a 15-Bcf withdrawal from stocks. The pull compared with respective year-ago and five-year average injections of 34 Bcf and 12 Bcf.

The first drawdown of the season brought the total U.S. working gas supply to 3,772 Bcf, about 271 Bcf below the year-ago level and 101 Bcf below the five-year average storage level of 3,873 Bcf.

The withdrawal anticipated in this week's data would result in a total working gas supply of 3,718 Bcf, or 129 Bcf below the five-year average and 327 Bcf below the year-ago level.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power, natural gas index prices, as well as forwards and futures, visit our Commodities Pages.