The U.S. Energy Information Administration (EIA) on Thursday is expected to report a 115-billion cubic feet (Bcf) withdrawal for the week that ended December 22, according to a survey of analysts by S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets.
Responses to the survey ranged for a withdrawal of 102 Bcf to 119 Bcf. The EIA plans to release its weekly storage at 10:30 am EDT on Thursday.
A 115 Bcf withdrawal would be much less than the 233 Bcf draw reported at this time in 2016 but slightly more than the five-year average pull of 111 Bcf.
A draw within analysts' expectations of 115 Bcf would deplete stocks to 3.329 trillion cubic feet (Tcf). It would increase the deficit to the five-year average to 88 Bcf and shrink the deficit versus the corresponding week in 2016 to a mere 65 Bcf.
For the week ended December 15 the EIA reported a 182 Bcf pull that decreased inventories to 3.444 Tcf, which was 5% less than the year-ago inventory of 3.627 Tcf, and 2.4% less than the five-year average of 3.528 Tcf.
Week over week, the EIA's South Central region is expected to account for more than 60% of the overall change in Lower 48 storage activity at a forecast withdrawal of 24 Bcf compared to an EIA reported withdrawal of 65 Bcf the previous week.
“Sample activity in the South Central region showed a salt-dome withdrawal 15.3 Bcf weaker than the previous week's at 2.6 Bcf compared to 17.9 Bcf, and a non-salt withdrawal of 10.6 Bcf compared to 19.4 Bcf the week prior, a decline of 8.7 Bcf,” said Mitch DeRubis, quantitative modeling analyst, S&P Global Platts. “The overall decline in South Central sample withdrawal activity measured 64% week over week.”
However, much cooler weather throughout the end of December and into January is expected to significantly increase withdrawal activity for the weeks ending December 29 and January 5. Temperatures are currently expected to come in much colder than normal for the remainder of the month. December 27 through December 31 U.S.-population weighted temperatures are forecast to average nearly 10.7 degrees below the 10-year average over the period.
The much lower than normal temperatures are set to spur U.S. total demand to as high as nearly 129 Bcf on December 31, implying a withdrawal of nearly 51 Bcf for the single day, according to S&P Global Platts Analytics. The high demand could push storage levels to just below 3.0 Tcf at December's end. This falls well below last year's 3.264 Tcf end-of-December inventory level as well as the five-year average of 3.261 Tcf.
The forecast for the week ending January 5, which contains both December and January days, is currently at a withdrawal of more than 300 Bcf, according to S&P Global Platts Analytics' supply and demand model. A withdrawal of that magnitude would be the largest withdrawal on record, besting the current record pull of 288 Bcf set the week ended January 10, 2014.
The weekly analyst survey is conducted by S&P Global Platts' editorial team, and is published every Wednesday, one day ahead of the 10:30 a.m. (ET) Thursday release of the weekly natural gas storage report of the U.S. Energy Information Administration. Platts has been conducting this survey since January 2007. The survey includes 15 to 25 analysts, some on a rotational basis.
*In its weekly natural gas report, the EIA divides the U.S. into five storage regions: East, Midwest, South Central, Mountain and Pacific. The full listing of the states that comprise each can be found here.