Working natural gas in underground storage fell by 151 BCF last week, about 6-7 BCF more than consensus expectations. Prices were already up substantially prior to the release, on colder forecasts for late January. And prices were up another 5-10 cents after the EIA information was published.
The forecast remains much much warmer than normal for the next two weeks, with low heating and electrical requirements. But a confidence interval is still probably centered on 1.7 TCF as the winter storage carryout in March, and that's currently supportive of the strip pricing, with production flat and the export/import balance steadily shifting toward net exports.
A third LNG train is expected to begin taking gas around April, and pipeline exports to Mexico are steadily creeping upward with each new pipeline expansion. So unless extreme warmth persists, and/or production suddenly begins another step up, the tightness should keep the gas strip comfortably above the $3 mark.
