Natural gas futures prices fell 43.5 cents/MMBtu over the week. The near-month (March 2014) futures contract decreased from $5.465/MMBtu last Thursday to $5.030/MMBtu yesterday, likely due to weather forecasts for more moderate temperatures beyond the next 5 days. Similarly, the 12-month strip (the average of the 12 contracts between March 2014 and February 2015) fell from $4.684/MMBtu January 29 to $4.614/MMBtu yesterday.
Gas consumption decreased as temperatures temporarily moderated. Total natural gas consumption for the report week fell 15.5% versus last week's levels, as temperatures were relatively moderate for most of the report week between winter storms. Consumption in the residential/commercial sectors drove the decline, falling 18.2%. However, the weather across most of the country remained significantly colder than normal, with consumption in the residential/commercial sector 9.9% higher than last year.
Electric sector consumption declined by 19.3%, driven largely by the Southeast. The largest volumetric decrease in electric sector gas consumption was in the Southeast, where power burn decreased from 7.7 billion cubic feet per day (Bcf/d) last report week to 5.4 Bcf/d this week. Power burn in the rest of the country was also down versus the previous week, except in the Southwest where electric sector consumption increased by 9.8% over the previous report week.
Decreased imports pushed supply down for the week. Bentek estimated dry production at 0.3% above the previous week's levels. Pipeline imports from Canada, however, declined by 17.9%, more than offsetting the production increases. LNG sendout also declined by 52.9%, but is a small piece of U.S. supply.
Gas in storage saw another sizeable net withdrawal. The net withdrawal reported for the week ending January 31, 262 Bcf, was the fifth highest net withdrawal since EIA started maintaining weekly storage statistics in 1993. It was 111 Bcf larger than the 5-year average of 151 Bcf and 133 Bcf larger than last year's net withdrawal of 129 Bcf. Current inventories totaling 1,923 Bcf are 778 Bcf (28.8%) less than last year at this time, 556 Bcf (22.4%) below the 5-year (2009-13) average, and 233 Bcf (10.8%) below the 5-year minimum.
Downward revision to last week's inventory levels. Resubmissions of data resulted in lowering estimates of working gas stocks in the Producing salt region by approximately 8 Bcf for the week ending January 24, 2014. The reported revision caused the stocks for January 24, 2014, to change from 2,193 Bcf to 2,185 Bcf. As a result, the implied net change between the weeks ending January 17 and January 24 changed from -230 Bcf to -238 Bcf.