Natural Gas Storage Report Withdrawal Season Week 12 (Week Ending January 19, 2018)

Today marked the sixth week in a row of triple-digit storage withdrawals, as today’s pull easily surpassed the market expectation of a 272 Bcf draw by coming in at a fairly massive withdrawal of 288 Bcf. Yet again, the pulls from last year and the five-year average were demolished by today’s withdrawal, which were shown to be at 137 Bcf and 164 Bcf respectively. After Tuesday’sjump of 30 cents on the prompt month, this somewhat bullish draw oddly finds the market falling around the $3.10/MMBtu mark in anticipation of milder weather conditions that are expected until the 1st of February. These patterns are predicted to change fairly quickly however, as a reinvigorated cold pattern is set to move into the Midwest and Plains regions during the first few days of next month. Despite the recent bullish market movement (on the prompt month in particular), the bears seemingly may not have settled in hibernation quite yet, but the increases in LNG exports, power burns, exports to Mexico, and industrial use are poised to prop up the opportunity for record demand in 2018.

Working natural gas inventories currently stand at 2,296 Bcf. This figure is 519 Bcf (18.4%) less than this time last year and 468 Bcf (17.5%) below the five year average.

The February 2018 NYMEX Future started around $3.47/MMBtu before the report’s release and has since dropped to $3.45/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

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