Withdrawal Season Week 14
(Week Ending February 1, 2018)
At first glance, this week’s mostly bearish withdrawal of 237 Bcf may seem imposing, but the abrupt end of the polar vortex that swept across the Midwest and parts of the Northeast during this reporting period was cause for the market to slope slowly downward. Warmer weather made itself known almost immediately after a couple of nearly record-setting cold shots in the previously mentioned regions, and the March-April spread on NYMEX actually turned negative for the first time in months as of this morning. Despite inventories sitting under 2 Tcf at the beginning of February, supply shortages aren’t in the cards, even with potential swings in demand expected over the next two weeks due to several colder weather patterns expected across most regions of the Lower 48. Little suggests any significant testing of resistance levels ($2.633-$2.649) should occur, and any close under $2.60 could set some fresh lows as winter begins to say its goodbyes during the next few weeks.
Working natural gas in storage currently stands at 1,960 Bcf, which is 135 Bcf (6.4%) lower than this time last year and 415 Bcf (17.5%) lower than the five-year average.
The March 2019 NYMEX Futures price began the day around $2.62/MMBtu prior to the report’s release, but has fallen to $2.60/MMBtu after the report was posted.
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.
The following table shows the injection numbers we will need to average by week to hit selected historical levels:
The following two graphs show current natural gas in storage compared to each of the last 5 years and weekly storage averages and patterns.
The graph below shows the injections through the current week over the past 5 years.
Finally, the graphics below depicts the 6 to 10 day temperature range outlook from the National Weather Service.
Current Week’s Outlook