February natural gas futures rise after EIA reports rising storage volume

February Nymex natural gas futures moved higher after taking the lead on Thursday, expanding profits following a supportive US Energy Information Administration (EIA) storage report for the week of December 22.

The fresh front-month contract was trading up 8.9 cents at $2.526/MMBtu by 10:30 a.m. ET. At 11 a.m. ET, February futures were 11.0 cents higher at $2,547.

The EIA reported drawing 87 Bcf from Lower 48 natural gas reserves, bringing total working gas supply to 3,490 Bcf. While it topped most industry estimates, the draw was well below the previous year’s hefty draw of 195 Bcf and the five-year average of 123 Bcf per week.

“Bull!” said one participant on online energy platform Enelyst.

Still, surpluses rose to 348 Bcf from last year’s level and were 316 Bcf above the five-year average, EIA data showed.

That number was above most estimates going to press. NGI modeled a withdrawal of 76 Bcf from the lower 48 reserves. A Reuters poll forecast a median withdrawal of 79 Bcf. HAS The Wall Street Journal exploration ranged from selections of 72 Bcf to 82 Bcf, averaging 78 Bcf.

“It was much warmer than normal for almost all of the U.S.” during the EIA sample period, NatGasWeather said in support of lower market estimates.

Data from finance company LSEG showed there were 142 heating degree days (HDDs) during the week under review, compared to the 30-year normal of 179 HDDs for the period.

Inventories in the Midwest fell 36 Bcf, according to the EIA. Stocks in the East fell 29 Bcf. The draw of 16 Bcf reported in the South Central region included a draw of 2 Bcf from salt caverns and 14 Bcf from non-salt facilities. Small withdrawals of 4 Bcf and 3 Bcf were recorded in the mountain and Pacific regions, respectively.

Last week’s EIA report drew 87 Bcf, which was also higher than market expectations but slightly lower than the five-year average of 107 Bcf.

NatGasWeather said surpluses could increase to more than 375 Bcf, with several other reports expected to print “well lighter than normal.”

The company said the weather was warmer than usual across most of the country last week, with Christmas and New Year’s Eve tending to bring milder demand and warmer weather forecast for much of the next 10 days.

“It will then depend on the cooler/bluer weather maps arriving in January to prevent further increases in surpluses,” NatGasWeather said.

Initial Reuters estimates for the week ended Dec. 29 ranged from withdrawals of 76 Bcf to 12 Bcf, with an average decline of 56 Bcf.

That compares with a withdrawal of 219 Bcf during the same week last year and a five-year average decline of 97 Bcf.

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