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OilMonster

Natural Gas February 08, 2019 01:00:33 AM

US Natural Gas in Storage Falls by 237 Bcf to 1.96 Tcf: EIA

Anil
Mathews
OilMonster Author
This was the largest draw of the current heating season and was the largest pull ever reported for the corresponding week.
US Natural Gas in Storage Falls by 237 Bcf to 1.96 Tcf: EIA

SEATTLE (Oil Monster):  US natural gas in storage fell by 237 Bcf last week, the largest draw of the season and in history for the corresponding week, but Henry Hub futures hit year-low prices following the release as it was still below market expectations. Only a double-digit draw is forecast for the week in progress.

US natural gas in storage decreased 237 Bcf to 1.96 Tcf for the week ended February 1, the US Energy Information Administration reported Thursday. The withdrawal was below an S&P Global Platts' survey of analysts calling for a 249 Bcf pull. Similar to last week, the draw was outside the range of survey responses. The lowest response expected a 238 Bcf withdrawal. The withdrawal was still much more than the 116 Bcf pull reported during the corresponding week in 2018 as well as the five-year average draw of 150 Bcf, according to EIA data. As a result, stocks were 135 Bcf, or 6.4%, below the year-ago level of 2.095 Tcf and 415 Bcf, or 17.5%, below the five-year average of 2.375 Tcf.

The NYMEX Henry Hub March contract slid 7.7 cents to $2.585/MMBtu following the 10:30 am EST announcement.

Demand losses in LNG feedgas and dramatically reduced heating loads weighed on both cash and futures prices this week, according to S&P Global Platts Analytics. Since last week's report, the March futures contract price has ground lower, with narrow daily trading ranges and consecutive lower settlements. On Wednesday, the March gas futures settlement was 19 cents lower than the February 27 settlement. The Henry Hub cash price, averaging $2.56/MMBtu, has fallen to levels not seen since February last year. While growing LNG exports at the end of the year may lend some support back to Henry Hub prices, the surge of availability and potential start-up of Nordstream II are likely to put EU Gas Prices and LNG prices under further pressure in the second half of the year, according to Platts Analytics. Frigid temperatures in the US upper Midwest have been unable to push Henry Hub back above $3/MMBtu after steady production growth and mild weather helped stocks build over the last month.

This was the largest draw of the current heating season and was the largest pull ever reported for the corresponding week. During the polar vortex of 2014, 231 Bcf was drawn during the same week. But a Platts Analytics forecast only expects a draw of 72 Bcf for the week that will end February 8, 88 Bcf below than the five-year average.

Total forecast sample withdrawals dropped more than 70% from 120 Bcf to 35 Bcf, implying that the inventory deficit to the five-year average will likely begin shrinking again. The South Central sample saw the largest change this week, flipping to a net injection of 7 Bcf from a net draw of 50 Bcf, mostly from strong salt injections, according to Platts Analytics.

Courtesy: www.spglobal.com

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