US Natgas Drifts Down from Highs of the Week Ahead of EIA Data

Henry Hub front month continues to pull back from the highs earlier this week ahead of the update EIA storage data later today. Prices however remain supported by strong demand due to cold weather and with a drop in US production.

• US Natgas FEB 24 down -1.1% at 3.01$/mmbtu
• US Natgas JUL 24 down -0.8% at 2.85$/mmbtu
• US Natgas JAN 25 down -0.5% at 3.98$/mmbtu
• The EIA weekly gas inventories for the week to Jan 5 will be released this afternoon at 10:30 ET (15:30 GMT). The expectation is for a draw of -122bcf according to a Bloomberg survey compared to the seasonal normal draw of -160bcf and the draw of just -14bcf the previous week.
• US natural gas production was yesterday down again to 102.7bcf/d according to Bloomberg with a drop in pipeline system flows from all US production basins amid severe cold. Forecasts for sub-freezing temperatures for West Texas in mid-January are threatening production freeze-offs in the Permian Basin, likely to support spot gas prices at Waha according to S&P Global.

• Domestic natural gas demand is holding above normal at 101.6bcf/d today according to Bloomberg. The US weather forecast is relatively unchanged from yesterday with below normal for much of the US in the coming two weeks although the West Coast is above normal in the 8-14 day period.
• Feedgas supplies to US LNG export terminals are today steady at 14.85bcf/d according to Bloomberg compared to an average of 14.7bcf/d so far this year..
• Export flows to Mexico are today at 6.18bcf/d after a recovery from start of the year lows.