The freezing temperatures in most of the Eastern U.S. in the week to January 5 led to the biggest ever weekly withdrawal from natural gas storage, data by the U.S. Energy Information Administration (EIA) showed on Thursday.
In its Weekly Natural Gas Storage Report, EIA said that in the week to January 5, working gas in storage decreased by 359 billion cubic feet (Bcf) from the previous week. As of January 5, working gas in storage was 2,767 Bcf. Natural gas stocks were 415 Bcf less than at this time last year, and 382 Bcf below the five-year average of 3,149 Bcf. At 2,767 Bcf, total working gas is within the five-year historical range, EIA said.
Last week’s draw was the largest weekly withdrawal ever, according to Reuters estimates of government energy data since 1994. The previous record natural gas withdrawal was 288 Bcf in January 2014 when an Arctic cold airmass surged south into the central and eastern U.S.
The record withdrawal in the first week of this year also beat estimates by analysts polled by Reuters, who had predicted a 333-Bcf withdrawal.
Even though the stocks are below the five-year average for this time of the year, traders told Reuters that natural gas supplies are enough to meet demand for heating in the winter. Weather forecasts also suggest that U.S. temperatures will remain mostly within seasonal limits for the rest of the winter. Expectations are also that U.S. production will stay high. Related: 3 Million Barrels Per Day Could Go Offline In 2018
On New Year’s Day, the U.S. burned the most natural gas ever recorded. The U.S. consumed 143 bcf of natural gas on January 1, breaking the previous record of 142 bcf during the polar vortex in 2014.
While natural gas stocks are currently below the five-year average and the market has significantly tightened over the past few months, natural gas prices are not surging because soaring production keeps the markets confident that there won’t be supply shortages, analysts say.
By Tsvetana Paraskova for Oilprice.com
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