The US Energy Information Administration today reported the US natural gas stocks rose by a total of 11 billion cubic feet, at the high end of the 7-11 billion cubic feet increase that analysts had expected. Natural gas prices responded by falling about -3% to about $2.29/thousand cubic feet.
The EIA reported that US working stocks of natural gas totaled 2.38 trillion cubic feet, about 835 billion cubic feet higher than the five-year average of 1.55 trillion cubic feet. Working gas in storage totaled 1.61 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. Production continues to increase as well.
Although the weekly drawdown was about as expected, US natural gas stocks are nearly 48% higher than they were a year ago and 54% 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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