Natural Gas Storage: -93 Bcf
Draw comes in slightly stronger than last year but well short of the five-year average.
The U.S. Energy Information Administration reported a weekly withdrawal of 93 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending December 20, 2024 (Link). Total inventories now stand at 3,529 Bcf, 14 Bcf (0.4%) above year-ago levels and 166 Bcf (4.9%) above the 2019-2023 average for the same week.
Natural gas inventories posted a net withdrawal of 93 Bcf, according to this morning’s EIA report. This continued the recent trend of storage draws coming in stronger than the year prior, edging out the same week in 2023, which saw a draw of 87 Bcf. However, inventories declined at a slower pace than the five-year average draw of 128 Bcf, increasing the surplus to that benchmark. The report week featured relatively mild temperatures across key U.S. population centers, which helped to loosen the implied fundamental balance by more than 3.5 Bcf compared to the previous week. While supply was relatively steady, demand was lower across all domestic sectors due to lighter heating requirements.
Published forecasts coming into today’s report spanned from a draw of 87 Bcf to 105 Bcf, with the consensus landing near a pull of 98 Bcf. This placed the actual number on the bearish end of the spectrum, and prices are behaving accordingly in the wake of the release. In its final day of trading prior to expiration, the January 2025 contract pushed higher this morning but has reversed course in the wake of the storage report. The rest of the curve is still up on the day, but prices across the board are well off of the intraday highs.
At the time of writing, the January 2025 NYMEX natural gas futures contract is trading at $3.680 per MMBtu, down $0.035 per MMBtu from yesterday’s settlement.
The most significant regional storage draw was reported in the Midwest, where stocks dropped by 47 Bcf to fall further behind year-ago levels. East inventories declined by 30 Bcf and remain at a deficit to both last year and the five-year average. Notably, Salt inventories in the South Central increased by 11 Bcf, marking the second largest build into that type of storage for this report week since at least 2010. The outsized build into Salt storage helped to skew the overall number smaller.
Next week’s report will likely show another relatively small storage draw due to mostly mild temperatures and lighter demand surrounding the Christmas holiday. However, temperature forecasts for early January continue to trend colder, and we could be in for a stretch of outsized storage draws in subsequent weeks. With this cold baked into the forecast, we now see potential for storage levels to be drawn down to near 1.7 Tcf by the end of winter. With the bulk of the winter withdrawal season still ahead, the end-of-season storage forecast is still highly variable depending on realized temperature patterns.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF Below:
