US Natural Gas Storage Report - 14 Jan. 2021
14 Jan 2021
Working gas stocks total 3,196 Bcf, which is 218 Bcf higher than the five-year average and 126 Bcf higher than last year at this time. Analysts’ expectations had been for a withdrawal of 129 Bcf. For the first time in a few weeks, the weekly inventory report surpassed expectations, but the market traded lower. The Feb20 NYMEX contract opened trading at $2.74 and ultimately lost about 6 cents on the day. The contract has been in a strong bullish uptrend, so profit-taking is to be expected.
The dreaded “polar vortex” term has been used by much of the trading and meteorological community over the last week. Due to shifts in the polar vortex, cooler weather will be pushed into the US, but it is unlikely to be as cold as the vent during the heating season of 2015/2016, which caused spot natural gas prices along the east coast to eclipse $130 DTH/day.
Dry natural gas production is still down almost 4.7% YOY. We can expect some decent sized storage withdrawals to be seen in the coming weeks (preliminary estimates based on scrape model data suggest a withdrawal above 150 BCF on next week’s report). February and March NYMEX futures could certainly rise to and above the $3.00 level under the right weather scenario.
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