Working gas stocks total 3,009 Bcf, which are 198 Bcf higher than the five-year average and 36 Bcf higher than last year at this time. Analysts’ expectations had been for a withdrawal of 177 Bcf. For the second time in as many weeks, the actual weekly storage withdrawal was larger than the market expected. The weekly withdrawal of 187 BCF marks the highest withdrawal seen since the week ending 1/24/20. Despite a very healthy withdrawal for this time of year, weather outlooks for the next two weeks have shifted away from a potentially bullish winter-like scenario to expectations for more normal to above normal weather in most major consuming regions.
With about 11 weeks left in the traditional winter heating season, traders will be eyeing where storage ultimately ends up before injection season begins. With a warmer bias for end of January and early February weather, storage looks like it could end up between 1.7-2.0 TCF. In previous years, this would be considered a healthy level of storage to end the heating season. However, with daily production down almost 4% against year ago levels and demand from both LNG and pipeline exports into Mexico seen well above year-ago and historic levels, storage inventories for next heating season 2021/2022 look concerning.
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