Henry Hub Extends Decline on Warmer Weather and Smaller Storage Draw

Henry Hub has pulled back to the lowest since Jan 3 as cold weather is expected to give way to warmer weather across the US next week. A smaller than expected storage draw in EIA data released yesterday added to the bearish pressure.

• US Natgas FEB 24 down -2.4% at 2.63$/mmbtu
• US Natgas JUL 24 down -1.4% at 2.71$/mmbtu
• US Natgas JAN 25 down -0.6% at 4$/mmbtu
• The EIA weekly gas inventories for the week ending Jan 12 showed a smaller than expected draw of -154bcf but still greater than the seasonal normal of -122bcf. The total US inventories remain near the top of the previous five year range at 3,182bcf compared to the average of 2,880bcf.
• Domestic natural gas demand remains above normal today at 115.8bcf/d but is likely to decline into next week with the arrival of warmer weather. The 6-14 NOAA forecast is still showing above normal temperatures across the US with lower 48 temperatures rising above on about Jan 23 after the cold this week.
• Feedgas flows to US LNG export terminals have recovered to 13.92bcf/d today. Flows are still below the levels of around 15bcf/d seen before the cold weather disruption with Corpus Christi and Calcasieu Pass yet to fully recover.
• Lower 48 dry gas production continues to recover from the severe cold disruption this week up to 100.5bcf/d today according to Bloomberg compared to between 104bcf/d and 106bcf/d before the freeze offs.
• Export flows to Mexico are steady today at 6.46bcf/d.