The weekly Energy Information Administration (EIA) natural gas storage data reported a decline of 50 billion Cubic feet (Bcf) for the week ending November 25th following a decline of 2 Bcf the previous week and this was a slightly lower draw that the 52 Bcf expected.
Overall stocks are now only 0.6% higher than the year-ago figure, although they remain 6.3% above the 5-year average. Regional variations remain stark with Pacific inventories 13.0% below year-ago levels with Mountain stocks 21.7% higher.
Gas prices will remain extremely sensitive to changes in weather conditions at this time of the year with any move to colder conditions triggering a sharp increase in demand for gas for heating.
Natural gas prices have maintained a strong tone this week with gains to the highest level in two years on Wednesday. Prices have increased sharply 24% over the past two week and also increased in 8 of the last 9 months.
Natural gas prices have gained support from a sharp rise in crude prices following the OPEC production deal. There has also been backing from the latest weather forecasts, which indicate that below-average temperatures will spread across most of the country over the next week.
Overall, prices increased to 3-week highs around the $3.35 per mBtu level on Wednesday and extended gains to above $3.40 on Thursday ahead of the inventories data.
Prices pushed higher again to fresh two-year highs above $3.47 following the data before drifting lower on profit taking.