EIA Natural Gas Storage Report - Feb 6

[dan_s]

Working gas in storage was 2,397 Bcf as of Friday, January 31, 2025, according to EIA estimates.
This represents a net decrease of 174 Bcf from the previous week.
Stocks were 208 Bcf less than last year at this time and 111 Bcf below the five-year average of 2,508 Bcf.
At 2,397 Bcf, total working gas is within the five-year historical range.

The 5-year average total draws from storage during February and March are between 800 and 900 Bcf. Last year the total draws were only 409 Bcf, so if the draws this year are 850 Bcf storage will be 1,547 Bcf at the end of March. That would be ~100 Bcf below the 5-year average and ~650 Bcf below where storage was on March 31, 2024.

I cannot stress enough that refilling storage before the next winter heating season begins in NOT OPTIONAL.
> Demand for U.S. natural gas increases year-after-year and the rate of increase is accelerating.
> Since the last refill season began on March 29, 2024 the change in the amount of natural gas in storage has been 711 Bcf below the 5-year average.
> So, to refill storage back to where it was when the winter of 2024/2025 began will be extremely difficult, if not impossible unless we have an extremely mild summer.
> In my opinion, this points to a Bidding War for physical gas supply in the futures market this summer. Just like we saw in August 2022.

[dan_s]

CelsiusEnergy.com forecasts, which are the most accurate that I've found, show the following draws for the next three weeks:
> Week ending Feb. 7: 93 Bcf draw, which is 48 Bcf lower than the 5-year average.
> Week ending Feb 14: 175 Bcf draw, which is 33 Bcf higher than the 5-year average.
> Week ending Feb 21: 181 Bcf draw, which is 39 Bcf higher than the 5-year average.

Joe Bastardi's weather forecast shows a repeating series of winter storms going through Minnesota & Illinois then turning east. A new storm every 3 to 5 days over the same area through early March. So, total draws from storage during February should end up being ~100 Bcf higher than the 5-year average. Unless the weather in the Northeast turns much milder than normal in March, natural gas in U.S. storage will be ~150 Bcf or more below the 5-year average at the beginning of the refill season. If the builds in April are below normal, we could see the front month NYMEX contract move over $4.00 early in Q3.

Traders see what I see, which is why the NYMEX futures contracts beginning with the MAY25 contract go higher month after month, with DEC25 trading at $4.52 at the time of this post. See: https://www.cmegroup.com/markets/energy/natural-gas/natural-gas.quotes.html

My 2025 forecasts are based on HH Ngas averaging $3.70 in 2025, with Q4 2025 averaging $4.25.