EIA - Natural Gas Storage Report - Feb 17

[dan_s]

Working gas in storage was 1,911 Bcf as of Friday, February 11, 2022, according to EIA estimates.
This represents a net decrease of 190 Bcf from the previous week.
Stocks were 404 Bcf less than last year at this time and 251 Bcf below the five-year average of 2,162 Bcf.
At 1,911 Bcf, total working gas is within the five-year historical range.

This is the 6th week in a row that the draw from storage has been larger than the 5-year average draw. Even more telling is that over the last 13 weeks (a quarter of a year) the draws have exceeded the 5-year average by 134 Bcf, despite December being mild weather.

My Wild Ass Guess (WAG) is that next week's report, for the week ending Feb 18, will show a draw of 150 Bcf which compares to the 5-year average of 172 Bcf.

My even bigger WAG is that the draw for the week ending Feb 25 will be ~130 Bcf, which compares to the 5-year average draw of 85 Bcf.

If my WAGs are accurate, the deficit to the 5-year average at the end of February will be 274 Bcf.

The 5-year average draws for the entire month of March are only 213 Bcf, so one late winter storm in March can have a big impact on where storage ends the winter heating season. The big dip in the jet stream that is driving Winter Storm Miles should remain in place for a few more weeks.

Again, the deficit to the 5-year average in storage at the end of March can have a SIGNIFICANT impact on natural gas prices all during the refill season. Why?
> Refilling storage is not optional. U.S. gas in storage must be ~4 Tcf by mid-November to make it thru a cold winter. If the deficit is 250-300 Bcf at the end of March, it should take several months of strong builds to get back to the 5-year average. We've had draws from storage in April; that would be extremely bullish.
> Strong demand for U.S. LNG is also becoming a bigger factor each year and the situation in Europe should keep global LNG prices high all year.
> The U.S. natural gas market is growing much faster than the oil market; primarily due to coal-to-gas for power generation and rapidly growing exports.