BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR PRIVACY & COOKIE NOTICE
X


NYMEX February gas contract soars following record draw from US storage

Houston (Platts)--11 Jan 2018 548 pm EST/2248 GMT


The NYMEX February natural gas futures contract spiked Thursday after the US Energy Information Administration announced an all-time high withdrawal from storage.

The February contract settled at $3.084/MMBtu, up 17.8 cents from Wednesday's close, its highest since November 29.

The EIA announced an estimated 359 Bcf pull from national storage stocks for the week ended January 5, well above the 337 Bcf withdrawal expected by a consensus of analysts surveyed by S&P Global Platts.

The withdrawal topped the previous record of 288 Bcf in the week ended January 10, 2014, according to EIA data.

The record pull from stocks came as temperatures across much of the country were well below average for the duration of the week, pushing demand to record levels and causing production freeze-offs in some areas.

The unprecedented withdrawal led to record pulls in the East, Midwest, Mountain and South Central regions, and dragged total national stocks down to an estimated 2.767 Tcf, a 12.1% deficit to the five-year average, according to EIA data.

The upward movement in price brings the front-month contract to a familiar place, the $3/MMBtu level. Since May 22, the front-month contract has only strayed more than 25 cents in either direction of $3/MMBtu 11 times, during a period in mid-December when record production met unseasonably warm temperatures.

US demand is projected by Platts Analytics' Bentek Energy to climb over the next week, averaging 104.2 Bcf/d over the next seven days, well above the 89.2 Bcf forecast for Thursday.

The increase in demand can be attributed in part to a forecast drop in temperatures across some demand areas in the US, as the most recent outlook for Chicago from the National Weather Service calls for a likelihood of below-average temperatures, with high temperatures reaching the low 20s through Wednesday, below the average high of 31.

The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2400 GMT).

--Eric Janssen, eric.janssen@spglobal.com

--Edited by Jason Lindquist, jason.lindquist@spglobal.com




Copyright © 2018 S&P Global Platts, a division of S&P Global. All rights reserved.