Natural Gas Inventories Expected to See Below-Average Drop

Mild Weather Leads to Decreased Demand for Heating

In the last week of December, natural gas inventories are predicted to have experienced a below-average decline due to unusually mild weather conditions across the United States. The limited demand for heating has contributed to this trend.

According to a survey conducted by the Wall Street Journal, a group of 10 analysts, brokers, and traders estimate that withdrawals of natural gas from underground storage totaled 44 billion cubic feet in the week ending on December 29. This would result in a decrease in storage from 3,490 billion cubic feet to 3,446 billion cubic feet compared to the previous week.

Estimates from the survey range from a withdrawal of 20 billion cubic feet to one of 86 billion cubic feet.

If the actual withdrawal is 44 billion cubic feet, it would be significantly smaller than the five-year average of 97 billion cubic feet for the corresponding week. This suggests an increase in natural gas surpluses.

As investors and traders look ahead, natural gas futures have already seen an uptick this week. The potential for colder weather in January has fueled anticipation of higher withdrawal rates in the coming weeks. On Wednesday afternoon, natural gas for February delivery was up 4.2% at $2.675 per million British thermal units.

The Energy Information Administration is scheduled to release its weekly storage report on Thursday at 10:30 a.m. EST.

Anthony Harrup