Natural gas storage inventories declined by 113 Bcf for the week ended Jan. 1, per EIA. The implied withdrawal was actually 117 Bcf as some reclassifications from base to working gas were noted in the South Central region, specifically from the non-salt facilities.
The draw was bullish as market expectations were in the 90s to low 100s and forward prices reacted with increases of 10 cents after the release.
Today’s withdrawal finishes the 2015 calendar year with U.S. storage inventories at record highs. The 3.643-Tcf level is 17% above 2014, 15% above the 5-year average, and 5% higher than the prior 5-year max.
Upcoming storage draws are expected to land in the mid- to high 100 level as cold weather is materializing. Despite cooler temperatures, early projections of strong withdrawals show smaller-than-historical values. Natural gas prices have recovered from their December lows, but weather forecasts call for warmer temperatures in the coming weeks, so expect downward pressure on prices.