According to an independent agency’s survey of analysts, the US natural gas withdrawal to weaken significantly in the week ended January 3 due to unseasonably warm weather in most of the country.
The survey expected only a 50 Bcf pull from gas storage stocks in the past week, or between 41-63 Bcf. The estimate was far lower than the 94 Bcf withdrawal in the same period last year, the 58 Bcf in the previous week, and the five-year average draw for the time of year of 184 Bcf.
A withdrawal within the expected range would decrease stocks to 3.142 Tcf, prompting the surplus to the five-year average to jump by more than 11 Bcf.
According to data from the independent agency who held the survey, US demand was slow in the last few days of 2019 and the first few of 2020 with a decrease of 3.1 Bcf/d, thus the withdrawal was smaller.
Supply also went down slightly by 160 MMcf/d week-on-week if net flows among the Northern American countries taken into account.
In the eastern US, the temperature rose week-on-week. That, combined with the year-end holidays, drove a decline in residential-commercial demand by 1.8 Bcf/d and 1.1 Bcf/d in gas-fired generation demand.
Going forward, analysts expected US demand for natural gas to be in the uptrend. At the moment, the demand averages near to 4.2 Bcf/d above the previous week. Supply is currently averaging lower from the previous week’s level by 400 MMcf/d, affected by lower production in the Northeast and Texas.
For the week in progress, the independent agency’s supply-and-demand model predicts a 90 Bcf draw, around half of the five-year-average draw even when it already improve from last week.
If the estimate holds, the surplus to the five-year average could be more than 300 Bcf by mid-January, resulting in the largest surplus since April 2017.
