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Natural gas storage draw below averages, expectations

The U.S. Energy Information Administration reported a net 119-Bcf withdrawal from natural gas inventories in the Lower 48 during the week ended Jan. 20 that was below market expectations and well below historical averages.

The withdrawal was less than the market consensus ahead of the report's release that called for a 121-Bcf drawdown from stocks, and was below both the 202-Bcf withdrawal reported for the same week in 2016 and the five-year average withdrawal of 176 Bcf.

The drawdown brought total U.S. working gas supply to 2,798 Bcf, or 348 Bcf below the year-ago level and 20 Bcf below the five-year average storage level of 2,818 Bcf.

February natural gas futures were sharply higher ahead of the data's release, touching $3.476/MMBtu while moving at $3.449/MMBtu, 11.7 cents higher on the session, at around 10:29 a.m. ET. Following the data's release, the contract extended gains to a $3.487/MMBtu high and was last seen 13.2 cents higher on the day at $3.464/MMBtu.

Options on February natural gas expire at the close of business and the contract rolls off the board at the Friday, Jan. 27, settle.

In the East, inventories were down 43 Bcf on the week at 596 Bcf, or 16.4% below the year-ago level. Storage levels in the Midwest were down 38 Bcf at 757 Bcf, or 8.8% below the year-ago level. In the Mountain region, storage levels were down 10 Bcf on the week to 173 Bcf, or 4.2% above the year-ago level, while in the Pacific region, storage levels were down 13 Bcf at 235 Bcf, or 14.5% below the year-ago level. In the South Central region, where storage levels were down a net 15 Bcf on the week, stocks are at a deficit of 10.8% to a year earlier.

Working gas stocks in the South Central region totaled 1,037 Bcf, with 325 Bcf in salt cavern facilities and with 712 Bcf in non-salt cavern facilities. Working gas stocks were up 13 Bcf in the salt cavern facilities and down 28 Bcf in non-salt cavern facilities since the previous week.

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.