Natural gas storage sees higher-than-forecast draw, limiting downside
Investing.com | Author Barani Krishnan
Published Feb 09, 2023 10:53AM ET
Updated Feb 09, 2023 04:10PM ET
By Barani Krishnan
Investing.com -- Utilities drew a higher-than-forecast 217 bcf, or billion cubic feet, from U.S. natural gas storage for heating and electricity generation last week, according to government data that helped the market settle above 2½-year lows.
Analysts tracked by Investing.com had expected the EIA, or Energy Information Administration, to report a draw of 195 bcf for the week ended Feb. 3, above the consumption of 151 bcf seen in the prior week to Jan. 27.
The front-month March gas contract on the New York Mercantile Exchange’s Henry Hub settled at $2.43 er mmBtu, or metric million British thermal units -- down 1.5 cents from Wednesday's close.
March gas briefly fell under Wednesday's session low of $2.367, setting a new 2-1/2 year bottom. Thursday's low was $2.351, the lowest for a front-month gas contract on the Henry Hub since Sept. 28, 2020, when it went down to $2.02.
An unusually warm start to the 2022/23 winter season has led to considerably less heating demand in the United States versus the norm, leaving more gas in storage than initially thought.
At the close of last week, U.S. gas storage stood at 2.366 tcf, or trillion cubic feet, up 10.9% from the year-ago level of 2.249 tcf, EIA data showed.
Responding to the warmth and lackluster storage draws, gas prices plunged from a 14-year high of $10 per mmBtu in August, reaching $7 in December and mid-$2 levels this week amid forecasts for bitter cold here and there.
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