Last week, natural-gas inventories were expected to decrease by a smaller amount than usual for this time of year, due to milder temperatures across the United States. According to a survey by The Wall Street Journal, withdrawals from underground storage were projected to be around 50 billion cubic feet for the week ending on December 8th. This would bring storage levels to 3,669 Bcf, down from 3,719 Bcf the previous week.
A group of nine analysts, brokers, and traders participated in the survey and all predicted a draw on inventories. Estimates ranged from a reduction of 44 Bcf to 62 Bcf.
The Energy Information Administration is scheduled to release its weekly storage report on Thursday at 10:30 a.m. EST.
In the previous week, gas inventories fell by a larger-than-anticipated 117 Bcf as a cold snap hit much of the country, driving up demand. However, forecasts for milder weather throughout December have since decreased demand and caused prices to reach six-month lows.
The Energy Information Administration’s monthly short-term energy outlook now estimates spot natural-gas prices at Henry Hub during the winter period to be around $2.80 per million British thermal units – a decrease of over 60 cents. This adjustment is attributed to high U.S. natural-gas production and mild temperatures limiting the need for heating in residential and commercial sectors.
The EIA stated, “We project that U.S. natural-gas consumption in the residential and commercial sectors will average nearly 40 billion cubic feet per day for the remainder of the winter heating season, which is 2% less than the five-year average.”
