The weekly natural gas inventory report to be released by the U.S. Energy Information Administration at 10:30 a.m. ET on Thursday, Jan. 26, is expected to show a sharp step down in the rate of storage erosion for the week to Jan. 20, with consensus well below the prior week's pull and trailing historical averages.

Analysts and traders surveyed ahead of the release of the upcoming EIA storage report anticipate a 111-Bcf to 135-Bcf withdrawal, with the consensus expectation being a storage withdrawal of 121 Bcf, about half of the previous week's withdrawal of 243 Bcf and well below the five-year average withdrawal of 176 Bcf and the 202-Bcf withdrawal reported for the same week in 2016.

Heating degree day data from the National Oceanic and Atmospheric Administration for the review week to Jan. 21 reflect unsupportive weather, outlining 31.5% fewer heating degree days compared to the same week last year and 29.3% fewer than normal for the week.

In the previous week's data, the reported net 243-Bcf withdrawal from natural gas inventories in the Lower 48 during the week ended Jan. 13 was above the market consensus ahead of the report's release that called for a 236-Bcf drawdown from stocks, and was above the 175-Bcf withdrawal reported for the same week in 2016 and above the five-year average draw of 170 Bcf.

The withdrawal brought the total U.S. working gas supply to 2,917 Bcf, some 431 Bcf below the year-ago level and 77 Bcf below the five-year average storage level of 2,994 Bcf.

The withdrawal anticipated in this week's data would result in a total working gas supply of 2,796 Bcf. The year-on-five-year-average deficit would fall to 22 Bcf while the deficit versus to the year-ago level would fall to 350 Bcf.

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