359 Bcf draw breaks previous record of 288 Bcf
The frigid temperatures seen over the past week have made their presence felt in natural gas markets, as the EIA reported the largest gas draw ever this week.
U.S. inventories declined by 359 Bcf from December 29 to January 5, even higher than the analyst estimate of 330 Bcf. Stocks declined throughout the country, but especially in the South Central region, where there was a draw of 153 Bcf.
The overall change is by far the largest draw that the EIA has ever recorded, no previous week even saw a draw of 300 Bcf. The previous record was a draw of 288 Bcf, set during the famous “polar vortex” in January 2014.
Source: EnerCom Analytics
Preliminary data suggests January 1 marked a new record in single-day consumption, with the U.S. burning 150.7 Bcf in the day. This also breaks the record set in January 2014, driven mainly by pipeline and LNG exports that have grown in the past four years.
Source: EnerCom Analytics
Gas prices rose on the news, climbing over 5% to $3.05/MMBTU. This extends the past month’s rally, where prices rose 17% from below $2.60/MMBTU.
Warmer weather coming
This record level of demand is not likely to continue for long, as temperatures in the country have warmed from frigid levels. Current forecasts suggest the eastern half of the country will experience a moderate cold spell next week, but higher temperatures are expected in the week after. This suggests that storage levels will approach the five-year average in coming weeks, as smaller draws allow the average to catch up.
Inventories are currently 13% below the five-year average, and are close to the lower end of the five-year historical range.
