The latest Energy Information Administration (EIA) natural gas storage data recorded a decline of 114 Billion Cubic feet (Bcf) for the week ending February 10th. This was a smaller decline than last week’s 152 Bcf decline and also significantly smaller than the expected draw of around 130 Bcf.
Stocks are now 11.0% below the year-ago figure, but 3.7% above the 5-year average compared with 1.8% recorded last week.
Stocks in the East are now 17.8% below last year’s level and 8.1% below the five-year average. Inventories in the Midwest and Mountain regions are 9.7% and 5.6% above the 5-year averages respectively.
Natural gas prices have generally remained under pressure over the past week with a decline to the lowest level for close to 3 months.
Expectations that regulatory changes under the new US Administration will boost activity and gas supply have continued to be an important factor in pulling prices lower. Although there have been snow storms in the East, underlying expectations have been that weather conditions overall will not be cold enough to support prices as the Winter season starts to draw towards a close which will lessen the potential for a big draw in stocks.
The latest Baker Hughes gas rig count also increased to 149 in the latest week from 145 previously with an annual increase of close to 50% which reinforced expectations of increased supply.
Prices also opened the week below the $3.00 per mBtu level which further undermined confidence with a test of support near $2.90 ahead of the inventories data.
Prices dipped to $2.88 from $2.92 immediately after the storage data as underlying sentiment remained weak.