EIA Insights January 04, 2019

EIA Insights January 04, 2019

Natural Gas

Withdrawal Less Than Expectations         

 The EIA reported a 20 bcf withdrawal for the week ending December 28, 2018. The withdrawal was the smallest for this week of the year, and less than the average of expectations of a 47 bcf withdrawal. This low withdrawal was due to increasing production and mild weather in the South Region where there was 20 bcf injection.      

 Monday, December 31, prices gapped down 50 cents to the $3 level on mild weather forecasts, increasing production and expectations of a below average weekly withdrawal. The storage deficit has reduced from over 700 bcf to a 420 bcf deficit compared to last year at this time.         

The $3 level may be new floor on prices. However, if the storage deficit continues to shrink prices may test the $2.50 level.      

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