Crude Oil Reverses Course
“Natural gas futures continued to decline this week despite what was a huge reported withdrawal from storage, reflective of the record-breaking cold suffered by the Midwest and Northeast last week,” Seng remarked. “Prices fell throughout the week, extending the downward trend started three weeks ago.”
Referencing the EIA’s most recent Weekly Natural Gas Storage Report, Seng pointed out that:
- Natural gas inventories fell by 237 billion cubic feet (Bcf) last week, below the consensus forecast of 247 Bcf and a bearish indicator
- Total gas in inventory below 2 trillion cubic feet (Tcf) – 1.96 Tcf, to be exact
“With effectively four weeks of February to go, and the high probability of cold weather in early March, we now stand at 6.4 percent lower than a year ago and 17.5 percent lower than the five-year,” said Seng. “Let’s hope Punxsutawney Phil is correct.”
In terms of production, Seng noted that last week’s figure was 87.4 billion cubic feet per day (Bcfd) while demand fell to 104 Bcfd – with the largest demands coming from the power and commercial/residential sectors.
“Exports to Mexico decreased to 4.8 Bcfd while LNG fell to 2.8 Bcfd,” concluded Seng. “Technically, March natural gas is trading below its five-day and well below its 10- and 20-day moving averages. The contract is now in ‘oversold’ territory.”
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