Although attempting to pull higher early Wednesday, Feb. 7, March natural gas futures settled the midweek session on the negative side of the ledger amid a lack of fundamental support. The contract closed the session down 5.7 cents at $2.702/MMBtu.
The next major catalyst for price movement will come at midmorning Thursday, when the U.S. Energy Information Administration releases its next slate of inventory data. Covering the week to Feb. 2, during which weather generated 12.0 fewer heating degree days than normal, analysts and experts anticipate a storage withdrawal well below historical average pulls.
A survey shows expected withdrawals from 99 Bcf to 129 Bcf, with a consensus pegged at a 115-Bcf pull. The latest figure will compare to the 142-Bcf year-ago withdrawal and the 151-Bcf five-year average pull.
At consensus, the withdrawal will be a step up from the 99-Bcf withdrawal reported in the previous week to Jan. 26 that brought total U.S. working gas supply to 2,197 Bcf, or 526 Bcf below the year-ago level and 425 Bcf below the five-year average storage level of 2,622 Bcf.
A withdrawal at this week's consensus would drive the total working gas inventory to 2,082 Bcf and would trim the year-on-year deficit to 499 Bcf and cut the year-on-five-year-average deficit to 389 Bcf.
Despite the modest bump up in the rate of storage withdrawals, winter is fast approaching its end and weather outlooks imply a tapering off in demand that should spell smaller weekly withdrawals from inventories leading into the shoulder season.
Concerned with the level of the natural gas supply at the titular end of withdrawal season March 31, weekly withdrawals that trail the five-year average should equate to a relatively healthy end-of-season supply.
Weather could ensure modest storage withdrawals going forward as outlooks call for milder temperatures in the mid-range and longer-range periods. The six- to 10-day weather map from the National Oceanic and Atmospheric Administration shows above-average temperatures blanketing the majority of the eastern and western thirds of the country, while average temperatures encompass the central U.S. Only a small portion of the north-west-central U.S. will see below-average temperatures.
Above-average temperatures recede in the East to include portions of the Northeast, mid-Atlantic, Southeast and Gulf, while the West will continue to see above-average temperatures that stretch to encompass a portion of the central U.S. Portions of the Northeast will join the majority of the central U.S. under average temperatures, while the area of below-average temperatures drifts to the east central U.S.
Longer-range, The Weather Company is calling for warmer-than-normal weather across the southern U.S. and colder-than-normal conditions for the northern half of the country from February through April. The National Oceanic and Atmospheric Administration sees a 40% or better chance that above-normal temperatures will prevail across much of the Northeast, the Southeast, the south-central U.S., Texas and parts of the West Coast over the same period, as average to below-normal temperatures settle over the Midwest and parts of the Northeast, Northwest and the north-central U.S.
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