Natural Gas
Withdrawal Less Than Expectations
The EIA reported a 59 bcf withdrawal for the week ending November 23, 2018. The withdrawal was greater than the average for this week of the year, 25 bcf, and less than the average of expectations of a 77 bcf withdrawal.
Because expectations were for a greater withdrawal prices dropped by as much as 10 cents with the release of the report. Prices had already been trading down so prices traded as much as 25 cents down from Wednesday’s close. By midday prices recovered, ending the trading day at about $4.59, 11 cents down from Wednesday’s close.
We expect the volatility to continue given the low storage level and the changing winter weather. Milder winter weather and relatively small withdrawals could have prices dropping to the $4.00 level. Colder winter weather and relatively large withdrawals could have prices jumping to $5.00 and higher.
Consequently, for the short term we still recommend consideration of being on the sidelines.
We would be happy to discuss this commentary with you and provide additional market insights. Feel free to call us at 312-348-7518 or email us at [email protected]
