Natural Gas Prices Decline Due to Smaller-Than-Expected Storage Draw

The lack of favorable factors could drive natural gas prices to reach fresh bottom levels.  

Highlights

• The storage of working gas decreased by only 49 billion cubic feet, falling short of what analysts had predicted.
• During this period, the typical five-year average shows a withdrawal of -149 billion cubic feet.
• The report underscores how weak demand has negatively affected the situation.  

The EIA's Weekly Natural Gas Storage Report, released on February 15, 2024, revealed that the working gas in storage reduced by 49 Bcf compared to the previous week.

Expectations were for a larger decline of 67 Bcf, disappointing those optimistic about natural gas prices. Currently, stocks are 255 Bcf higher than this time last year and 348 Bcf above the five-year average.

In broader terms, mild weather is continuing to negatively affect natural gas markets by keeping demand low, resulting in a lower EIA draw than usual for this time of year, which typically averages at -149 Bcf.

Following the report, natural gas prices retreated noticeably, reaching multi-month lows. While some traders may anticipate a rebound, the uninspiring weather forecasts create uncertainty around whether natural gas will experience further downward pressure.