Natural Gas Storage Report: Withdrawal Season Week 4 (Week Ending November 24, 2017)

Cliff McGaha, Energy Markets Analyst

Fluctuating weather models continue to headline this year’s Withdrawal Season, as natural gas surpluses reflected an unexpectedly light pull for last week. Today, the EIA reported a net withdrawal of 33 Bcf, which was right in line with expectations of a 31 Bcf draw. To note, 53 and 50 Bcf were withdrawn this time in 2015 and 2016 respectively, though the five year average stands at 27 Bcf. The bulls came charging out of the holiday weekend with January through March 2018 futures rallying three straight days, as long-term forecasts shifted colder. Short-term demand is expected to remain mild until cooler temperatures arrive this weekend, indicating another potentially seasonally light withdrawal to be reported next Thursday.
 
Working natural gas inventories currently stand at 3,693 Bcf. This figure is 309 Bcf (8.4%) less than this time last year and 107 Bcf (2.9%) below the five year average.
 
The January 2018 NYMEX Future was depressed under $3.10/MMBtu before the report’s release, and has continued to fall to just over $3.04/MMBtu since.

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Outlook for the Balance of Storage Season:

The graph below compares historical 12, 24 and 36 month strip prices and storage levels for the past 5 years.

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The following table shows the injection numbers we will need to average by week to hit selected historical levels:

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The following two graphs show current natural gas in storage compared to each of the last 5 years and weekly storage averages and patterns.

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The graph below shows the injections through the current week over the past 5 years. 

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Finally, the graphic below depicts the 6 to 10 day temperature range outlook from the National Weather Service. 

Current Week's Outlook
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Future Outlook
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