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U.S. natural gas storage inventories decreased by 50 Bcf during the week ending Nov. 25, per EIA.
The 50 Bcf draw was relatively in line with market expectations of a draw in the low 50s and full range of forecasts expecting a draw between 26 and 65 Bcf. The withdrawal compares to a 35 Bcf reported last year.
The report is bullish as prices are up 11 cents this morning with about 3 cents of the gains happening after the storage report. Prompt month (Jan2017) is trading at $3.47 per MMBtu, at time of writing.
(Click to enlarge)
Storage inventories dropped below the 4 Tcf mark and stand at 3.995 Tcf, level only 0.6% above 2015 which is also the prior 5-year high, and 6.3% above the 5-Year average.
There is a bullish sentiment in the market that started about 3 weeks and that have been more pronounces since last week. The Jan17 contract is up 28% or 75 cents since the lows seen on Nov 9th.
Winter weather is finally materializing and although there will be a bearish storage report next week (smaller-than-average draw), the following two weeks will see significant higher draws than historical and will push inventories below last year and 5-year highs.
Drillinginfo continues to project price gains over the current forward curve with prices reaching levels north of $4.00+/MMBtu during winter months in 2017.
By Maria Sanchez via Drillinginfo.com
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