Happy Storage Day.
The EIA storage report for the week ending January 3rd was released early this week, since tomorrow is the National Day of Mourning for former President Carter in the US. Federal offices will be closed, along with the New York Stock Exchange, but the NYMEX will remain open. Be prepared for some confusion as to what is or is not open tomorrow. Trading will probably remain liquid since nobody was planning for a day off.
There was a big spread in predictions, from -53 to -31 Bcf, but came in at a withdrawal of -40 Bcf. The market didn’t immediately move, so it wasn’t a big spook. Throughout the day though, the NYMEX February front month contract drifted up to $3.66 USD/mm. The next two reports will be for withdrawals of at least -200 Bcf as this cold snap seems to be forecasted to stay (‘colder for longer’).
Freeze-offs have been a bit less than expected so far but they are going to get worse. I think we need to look beyond this cold snap and ask what will happen after it is over. My expectation is for the NYMEX to fall when the forecast returns to warmer-than-average, but that is only my best guess at this point.
[WFG]
