Another larger-than-expected withdrawal came to pass this week as the EIA reported a slightly bullish pull of 149 Bcf that dwarfed both last year’s draw of 60 Bcf and the five-year average of 109 Bcf. With March now upon us, cold shots concentrated in the central, northern, and eastern U.S. are bringing expectations for yet another triple digit dip into storage for next week, but much like the polar vortex earlier this year, nearly instant warming will occur after the cold event. Despite this last minute weather change, Spring, the shoulder months, and the end of withdrawal season are fast approaching in tandem, and weather-driven rallies are looking less and less likely. That being said, working gas inventories holding onto a 25% deficit against the five-year average is still a point of contention as to whether or not the $3/MMBtu mark will remain a ceiling or switch to being a floor as we head into warmer weather. The current supply picture certainly suggests the former, but next week’s report will be pivotal for the short term.

 

Working natural gas in storage currently stands at 1,390 Bcf, which is 243 Bcf (14.9%) lower than this time last year and 464 Bcf (25.0%) lower than the five-year average.

 

The April 2019 NYMEX Futures price began the day around $2.84/MMBtu prior to the report’s release, but remained flat 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

Future Outlook