The U.S. Energy Information Administration (EIA) is set to release its Weekly Gas Storage Report on Thursday at 10:30am EST. Natural gas prices for January ’16 delivery were down just over two cents early Thursday morning at $2.139 per mmBtu.
The median estimate of industry analysts is for a withdrawal of -51 Bcf. If actually reported, the withdrawal would be 29 Bcf more than the 2014 reported withdrawal (-22 Bcf) and 40 Bcf more than the five-year average (-11 Bcf).
NatGasInvestor.com estimates that the withdrawal will total -45 Bcf. The current range of estimates from industry analysts is for a withdrawal from -24 Bcf to -66 Bcf.
JPMorgan, the top-ranked analyst according to NatGasInvestor’s Analyst Accuracy Rankings, estimates that the withdrawal will total -47 Bcf. Thomson Reuters Analytics, the second highest ranked analyst, estimates that the withdrawal will total -55 Bcf.
Natural gas prices have been under serious pressure as of late as December warmth and a strong U.S. dollar have collapsed prices to their current levels. Current GFS models show no indications of cooler temperatures as above average temperatures are expected to continue in the Midwest and Northeast through December 19.
Meanwhile, Thursday’s report will mark the first withdrawal of the 2015/2016 withdrawal season. The traditional withdrawal season starts in the beginning of November. With storage levels currently at 4,009 Bcf, a late start to withdrawal season, and a warm December ahead, prices could certainly touch 2012 lows again.
“The writing has been on the wall,” said Steve Kingston, a reporter for NatGasInvestor.com. “Natural gas is going to need significant demand in the latter half of winter to recover from the lack of demand in December in my opinion.”
“With the stronger dollar in play and the broader commodity picture bearish as well, I hope we see some capitulation in December where some solid core positions can be established for the latter half of winter as well as the potential for lower production, natural gas exports, and La Nina to follow this current El Nino in the longer term,” said Kingston.
To see the report at 10:30am EST, visit this link.
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