The February wholesale contract rebounded by 32.4 cents this week to $3.509 Wednesday on the New York Mercantile Exchange after touching $3.628 the previous evening, the highest intraday price Dec. 2016. February gas touched a 50-cent premium to March, the most for this time of the year in exchange data going back to 1990.
With the move in wholesale contracts concentrated in the February contract, which expires on Jan. 29, the market “needs to get through” the major weekly storage event on Thursday before triggering a decisive push in either direction. There “could be a very wild ride between now and Monday” as more bulls enter the market as large inventory draws may cut end of winter storage estimates even more.
One key place to watch is if March wholesale contract rise along with the premium to April, which marks the start of the seven-month stockpiling season. Momentum for that appears to be picking up this week.
See a recap of previous weeks EIA storage reports here.
EIA Natural Gas Storage Report 01-25-18
In their weekly storage report released this morning, the U.S. Energy Information Administration reported a withdrawal equal to the second largest ever recorded. The amount of natural gas in storage fell by 288 Bcf in the week ending January 19, which was the same as reported for the week to Jan 10, 2014, during a polar vortex. The second wave of frigid temperatures across most of the country during the reporting week boosted demand, while at the same time, curtailed production due to well freeze-offs. The record for the largest withdrawal ever, 359 Bcf, occurred just two weeks ago.
The pull from storage was significantly larger than the 272 Bcf market analysts had estimated, and was far larger than last year’s 137 Bcf withdrawal for the corresponding week, as well as the 164 Bcf five-year average.
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Review a recap of previous weeks EIA Natural Gas inventory Reports.
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