US gas storage fields look to drain approximately 200 Bcf as deficit widens

US storage fields possibly drained more than 200 Bcf for the fifth consecutive week as the Henry Hub summer strip hovers around $4.35/MMBtu, but below-average draws look likely ahead as weather-driven demand dips.

The US Energy Information Administration is expected to report a 197 Bcf withdrawal for the week-ended Feb. 11, according to a survey of analysts by S&P Global Platts. However, responses to the survey ranged from a 185 to 214 Bcf withdrawal. The EIA plans to release its weekly storage report on Feb. 17 at 10:30 am ET.

A 197 Bcf withdrawal would be more than the five-year average draw of 154 Bcf but less than the 227 Bcf pull reported during the corresponding week in 2021. It would reduce stocks to 1.904 Tcf. The deficit to last year would contract to 411 Bcf. The deficit to the five-year average would grow to 258 Bcf.

The report for the week ended Feb. 11 might end the month-long streak of withdrawals exceeding 200 Bcf, though there is some risk to the high side of the 197 Bcf survey average. Overall, supply and demand balances were approximately 3.3 Bcf/d looser during the reference week compared with the week before, which over the course of seven days suggests that 23 Bcf less gas was needed from storage to cover the supply shortfall, according to S&P Global Platts Analytics.

Applying that logic to last week's reported 222 Bcf storage withdrawal, inventories are likely to have decreased by approximately 199 Bcf. In reality, a host of other facts are taken into consideration when building the forecast, including sample pipeline flows and regional weather patterns.

The NYMEX Henry Hub March contract increased 3 cents $4.23/MMBtu during the trade day on February 15. The upcoming summer strip, April through October, averaged $4.35/MMBtu.

A forecast by Platts Analytics calls for a 117 Bcf draw for the week ending Feb. 18, which would be the first smaller-than-average withdrawal reported during 2022.

Demand has dropped steadily during the week in progress. Total demand eased by 10 Bcf/d to 117.3 Bcf/d Feb. 15, primarily driven by softening residential and commercial and power-burn demand, according to Platts Analytics.

Res-comm slid 5.8 Bcf/d lower on Feb. 15 to 44.8 Bcf/d, with the decrease concentrated in the Northeast and Upper Midwest where temperatures were warming after dropping over the weekend. Power burn was down by 4 Bcf/d Feb. 15 at 25.5 Bcf/d; the declines also came from the Northeast and Midwest, as well as the Southeast and Texas.

Industrial demand also contributed to lower daily demand, down by 800 MMcf/d, while exports to Mexico and LNG feedgas climbed by 200 and 700 MMcf/d, respectively. On the supply side, production remained at 94.1 Bcf/d Feb. 15 while lower imports from Canada and LNG sendout drove total supply down 1 Bcf/d.