Weather forecasts continue to heighten volatility for natural gas. Henry Hub natural gas futures for March are trading at US$4.51/MMBtu as of 12:15pm EDT Thursday afternoon, down over 4% from yesterday’s close of US$4.717/MMBtu. Prompt-month futures have jumped over 14% from last week, with hints of a cooler weather outlook for late February and early March, and continued storage withdrawals above the five-year average. The ongoing tensions between Russia and Ukraine remain a risk to push prices higher.
The EIA estimated working gas storage was 1,911 Bcf for the week ending February 11th, following an overall withdrawal of 190 Bcf. The withdrawal was slightly lower than market expectations averaging 196 Bcf, but still higher than the five-year average withdrawal of 154 Bcf. Storage levels are now 17.5% below year-ago levels and, relative to the five-year average, 11.6% less.
In Canada, prompt-month futures for AECO are trading at C$4.55/GJ, while Dawn is trading at C$5.74/GJ. Prices have risen, with week-over-week increases of $0.78/GJ and $0.93/GJ at AECO and Dawn, respectively. Point Logic reports Canadian natural gas storage for the week ending February 11th was sitting at 370 Bcf, after a withdrawal of 17 Bcf. This withdrawal decreases storage inventories to 18.3% below the 5-year average and 21.1% below storage levels last year at this time. Canadian storage is 42% full, with Eastern storage levels now at 43% of capacity and Western storage 43% full. A withdrawal of 28 Bcf is expected for the week ending tomorrow.
– Karyn Morrison, Energy Advisor
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