Natural gas prices in the U.S. fell sharply by more than 14% to $3.83 per million British thermal units (MMBtu). This decrease came after the Energy Information Administration (EIA) reported a smaller withdrawal from storage than analysts had predicted.
Natural Gas Reserves Dip Below Expectations
Over the past week, utilities pulled out 116 billion cubic feet (bcf) of natural gas, less than the anticipated 127 bcf. This withdrawal brought the total reserves down to 3,414 bcf, slightly narrowing the excess compared to the five-year average of 4.7%.
Stocks are now also 1.9% below the levels from the same time last year. Despite the drop in prices, the market is poised for a weekly increase as forecasts predict unusually cold weather from January 6 to January 17, which could push up demand for heating.
Natural Gas Shipments to the US Set to Rise
Natural gas shipments to U.S. liquefied natural gas (LNG) export facilities are expected to rise following the termination of a pipeline agreement between Russia and Ukraine. Yet, it’s worth noting that 2024 marked the first year of decline in LNG feedgas volumes since the U.S. started exporting LNG in 2016.