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Natural gas storage withdrawal rate seen slowing with demand

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Natural gas storage withdrawal rate seen slowing with demand

The natural gas inventory report to be released at 10:30 a.m. ET on March 1 by the U.S. Energy Information Administration is expected to show a steep decline in the rate of storage erosion for the week to Feb. 23.

Market analysts and experts surveyed are calling for a storage withdrawal from 60 Bcf to 82 Bcf, with a consensus pegged at a 75-Bcf pull. The latest figure will be a significant step below the 124-Bcf withdrawal reported in the previous week and will compare to the 7-Bcf year-ago withdrawal and the 118-Bcf five-year average pull.

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The 124-Bcf pull reported for the week ended Feb. 16 brought total U.S. working gas supply to 1,760 Bcf, or 609 Bcf below the year-ago level and 412 Bcf below the five-year average storage level of 2,172 Bcf. The pull was within the wider range of trader and analyst estimates but came in higher than the consensus expectation of 116 Bcf.

Weather is expected to have contributed to the anticipated slowdown in the storage withdrawal this week, as residential/commercial-sector demand was down 24% week on week, largely because of warmer conditions in the eastern half of the country, the EIA said.

A withdrawal at consensus would drive total working gas inventory to 1,685 Bcf and would widen the year-on-year deficit to 677 Bcf but would trim the year-on-five-year average deficit to 369 Bcf.

According to the EIA, storage will total 1,290 Bcf by the traditional end of withdrawal season March 31 as long as withdrawals match the five-year averages for the balance of the season.

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.