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NYMEX March Gas Contract Drops as EIA Announces Weaker-Than-Expected Storage Withdrawal

The NYMEX March natural gas futures contract slipped in trading Thursday, as the US Energy Information Administration announced a weaker-than-expected withdrawal from national gas stocks for the week that ended February 1.

The March contract settled at $2.551/MMBtu, a 11.1-cent drop from
Wednesday’s close.
The EIA announced an estimated 237 Bcf withdrawal from storage
stocks for the week that ended February 1, below the 249 Bcf expected by a consensus of analysts surveyed by S&P Global Platts. Though the pull from storage was lower than expected, the withdrawal paced well above the 150 Bcf draw averaged over the past five years.
Currently US working gas storage sits at an estimated 1.96 Tcf, a
17.5% deficit to the five-year average of 2.375 Bcf, according to EIA data. Thursday’s decline marks the sixth time over the past nine trading sessions in which the March contract has experienced losses, dropping 52.1 cents during that time.
Though the withdrawal from storage was above average, looking
ahead, production may be able to cut into some of the deficit currently
held against the five-year average, as the month-to-date total demand
in the US including Mexican exports and LNG feedgas has averaged
98.4 Bcf/d, well below the 109.7 Bcf/d averaged during the same period February 2018.
Down the curve prices also dropped, with the April and May
contracts dipping 8.5 cents and 7 cents, respectively.
Looking ahead, the most recent six- to 10-day weather outlook from the National Weather Service calls for varying temperatures, with the West and Midwest forecast to have a likelihood of lower-than-average temperatures, and much of the Southeast and Northeast to experience warmer-than-average weather.

Source: Platts 2019

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