US natural gas in underground storage falls 28 Bcf to 3.160 Tcf: EIA
US working natural gas volumes in underground storage dropped by 28 Bcf, decreasing by just under half the five-year average, while the NYMEX January Henry Hub contract fell about 3 cents after the number’s release, continuing recent declines and nearing an all-time low.
Storage inventories fell to 3.610 Tcf for the week ended November 22, the US Energy Information Administration reported Wednesday, one day ahead of the usual schedule because of the Thanksgiving holiday in the US.
The pull was slightly more than an S&P Global Platts’ survey of analysts calling for a 25-Bcf draw. Survey responses were a withdrawal of between 14 Bcf to 33 Bcf.
The withdrawal was well below the 70 Bcf pull reported during the corresponding week in 2018, as well as the five-year average draw of 57 Bcf, according to EIA data. As a result, stocks were 548 Bcf, or 18%, above the year-ago level of 3.062 Tcf and 31 Bcf, or 1%, above the five-year average of 3.641 Tcf.
The draw proved well below the 94 Bcf pulled from working gas in storage reported the week prior.
Temperatures across the US rose 5 degrees week on week, with warmer weather particularly focused in the Midwest and South Central storage regions. The EIA reported a net injection of 2 Bcf into South Central region storage fields and 1 Bcf addition in the Pacific region.
Although temperatures remain 2 degrees below normal, warmer weather for the week that ended November 22 cut out an estimated 49 Bcf of residential and commercial demand, according to S&P Global Platts Analytics. Weaker power burn also contributed to the bearish draw, declining an estimated 2.1 Bcf/d, largely in the Southeast.
Inventories will continue to be supported into December from strong production receipts out of Texas and the US Northeast, keeping the gas market bearish, barring another cold snap.
The now prompt NYMEX January Henry Hub contract has been under heavy selling pressure this week, as forward-looking temperatures have moderated. Since hitting a monthly peak of just under $3.00/MMBtu November 5, the January contract has contracted by roughly 15%. Indeed, entering the report the contract was sitting just above $2.50/MMBtu, or within striking distance of the all-time intraday low of $2.48/MMBtu August 5.
A forecast by Platts Analytics’ supply and demand model has storage volumes falling a mere 18 Bcf for the week ending November 29.
Demand has declined 1.7 Bcf/d week on week, and total supply fell a more moderate 0.3 Bcf/d. Residential and commercial demand and power burn paced the demand losses, weakening 0.8 and 0.7 Bcf/dd, respectively.
Pivoting to supply, domestic production increased by 0.7 Bcf/d, with Texas leading the gains at 0.5 Bcf/d.