Natural Gas Futures Trade Negative Following In-Line Storage Withdrawal

Utilities withdrew 23 Bcf of natural gas from storage for the week ended March 31, the U.S. Energy Information Administration (EIA) reported Thursday. The result was essentially on par with market expectations, leaving Nymex natural gas futures to drift lower.

“Overall neutral release,” said one participant on the online energy platform Enelyst.

Ahead of the 10:30 ET print, the May Nymex futures contract was down 2.0 cents to $2.135/MMBtu. When the EIA data was released, the prompt month hovered around $2.107.

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By around 11 a.m., May futures were off 6.0 cents from the previous day’s close at $2.095.

Prior to the report, a Reuters survey found estimates ranging from withdrawals of 10 Bcf to 28 Bcf, with a median decrease of 22 Bcf. A Bloomberg poll landed at a median draw of 20 Bcf. NGI modeled a pull of 22 Bcf, matching the average found in a Wall Street Journal poll.

EIA recorded a 24 Bcf pull for the year-earlier period, while the five-year average showed no net change to stockpiles for the week.

The withdrawal lowered inventories at 1,830 Bcf, yet stocks remained far above the year-earlier level of 1,387 Bcf and ahead of the five-year average of 1,532 Bcf.

By region, the Midwest and East regions led with pulls of 16 Bcf and 8 Bcf, respectively, according to EIA. Mountain region stocks declined by 2 Bcf, while Pacific inventories were flat.

The South Central region, meanwhile, posted an increase of 4 Bcf. This included a 3 Bcf injection into nonsalt facilities and a 1 Bcf increase in salts.

“It was colder than normal over the western, central and northern U.S., while warmer than normal over East Texas, the South and Southeast,” NatGasWeather said of temperatures during the EIA report period.

Looking ahead, forecasts point to benign temperatures across the Lower 48 through most of April, indicating storage injection season is around the corner.

For the next EIA print, early estimates submitted to Reuters for the week ending April 7 ranged from an injection of 39 Bcf to a withdrawal of 20 Bcf, with an average increase of 30 Bcf. That compares with an increase of 8 Bcf during the same week last year and a five-year average build of 28 Bcf.