The EIA reported a net gas storage withdrawal of 151 BCF this morning for the week ending January 6, 2017. This week’s report was above the market’s expectation which was centered around a 144 BCF withdrawal. It is neutral against 152 BCF withdrawn in this same week last year and compares bearishly against the five year average for this week which is a withdrawal of 168 BCF.
February 2017 NYMEX natural gas futures are currently up $0.20 at $3.42/MMBtu. Gas futures have experienced unusually large weather related price swings to start the year. After spiking to nearly $4.00/MMBtu on extreme cold weather to close out 2016 and then collapsing to nearly $3.00/MMBtu after a surprise shift to much warmer forecasts to start the new year, prices are moving back up again on forecasts for cold weather to return again at the end of January.
February 2017 NYMEX crude oil futures are currently $0.76 higher at $53.00/Bbl. Oil futures have experienced volatility in the past week as the market handicaps the extent that production cuts announced by OPEC and other major oil producers will materialize, and if so, whether US shale producers, Iran and others will ramp up production to fill the gap. Although futures have managed to stay above $50/BBl since the OPEC announcement at the end of November, it doubtful they will continue to do so unless hard evidence of a tightening of the world oil supply/demand balance does not become evident in the coming months.
Natural gas inventories currently stand at 3,160 BCF which is 363 BCF less than from this same week last year and 4 BCF below the five year average.