Confidence in the anticipated cold snap slotted to occur during the first few days of February has certainly diminished from last week as the streak of triple digit storage withdrawals ended with a 99 Bcf pull, falling short of the market expectation of 104 Bcf. This withdrawal managed to scrape by last year’s value of 92 Bcf, but paled in comparison to the five-year average withdrawal of 150 Bcf. While the bulls are fighting to maintain their influence due to the recent colder weather patterns, they are struggling to do so as we approach the shoulder months with no significant fundamental weather factors in sight. Heating demand continues to drop and production is setting record highs, so the next few weeks could see a downward trend that will yet again fall, and possibly stay, under $3/MMBtu. Technical guidance suggests this is simply a correction, but this week’s withdrawal certainly doesn’t seem to favor a market looking to bounce back from a change in the prompt month.
Working natural gas inventories currently stand at 2,197 Bcf. This figure is 526 Bcf (19.3%) less than this time last year and 425 Bcf (16.2%) below the five year average.
The March 2018 NYMEX Future started around $2.88/MMBtu before the report’s release and has since dropped to $2.86/MMBtu.
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