EIA Insights February 27, 2020

Withdrawal Less Than Expectations

The EIA reported a 143 Bcf withdrawal for the week ending February 21, 2020. The withdrawal was greater than the average for this week of the year, 98 Bcf, but less than the average of expectations of a 152 Bcf withdrawal.

Storage at 2,200 Bcf is 662 Bcf above last year at this time and 179 Bcf above the 5-year average. The report was mildly bearish to prices and prices dropped with the release of the report. Prices did recover but still ended down about 8 cents for the trading day.

Over the weekend, weather forecasts turned warmer, pressuring prices. Prices have been falling through the week and broke below $1.80 this morning. With weather forecasts showing normal to above-normal temperatures in areas with high demands for heat, market sentiment is very bearish. Natural gas is a component of the energy complex. Natural gas prices are influenced by crude oil prices, so the $7 drop in crude oil prices this week also pressured natural gas prices.

 

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Regards,
The Fundamental Analytics Team

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