The US Energy Information Administration today reported the US natural gas stocks fell by a total of 64 billion cubic feet, higher than the drawdown of 56-60 billion cubic feet that analysts had expected. Natural gas prices responded by rising about 1.5% to about $2.31/thousand cubic feet.
The EIA reported that US working stocks of natural gas totaled 2.47 trillion cubic feet, about 807 billion cubic feet higher than the five-year average of 1.56 trillion cubic feet. Working gas in storage totaled 1.63 trillion cubic feet for the same period a year ago.
Warmer winter temperatures, which have kept natural gas prices under pressure, are expected to continue through March. April is typically a low-demand time for natural gas, as demand for heating falls and demand for air conditioning has not started.
Although the weekly drawdown was larger than expected, US natural gas stocks are 45% higher than they were a year ago and nearly 52% higher than the 5-year average. This situation does not augur well for significant gains in prices for producers.
Paul Ausick
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