After a day of reprieve yesterday, natural gas markets continued their plunge, falling to a 5-week low today. The NYMEX front month fell $0.36 USD/MMBtu (8%) to settle at $4.23 USD/MMBtu. The drop was concentrated in the front two months with the calendar strip (Jan-26 to Dec-26) only falling 3%. The substantial price drop came despite a bullish storage report and fairly neutral weather revisions to the forecast.

US storage posted a massive withdrawal of 177 bcf in today’s EIA update, 4 bcf higher than the WSJ survey estimate of 173 bcf. After the withdrawal, lower 48 storage sits at 3,746 bcf, 28 bcf (0.7%) lighter than last year and 103 bcf (2.8%) heavier than the 5-year average. Analysts expect the storage surplus to flip to a deficit after the next two EIA updates, but regain ground at the end of the month when warmer weather appears. (PB)