FX.co ★ US Natgas Prices Fall After Smaller-Than-Expected Storage Draw

U.S. natural gas futures experienced a decline of over 2%, settling at $3.39 per MMBtu on Thursday. This drop followed a smaller-than-anticipated record storage withdrawal and forecasts predicting warmer weather, which alleviated concerns about demand. The Energy Information Administration (EIA) reported a notable 360 billion cubic feet (bcf) withdrawal for the week ending January 30. Although this figure surpasses last year's and the five-year average, it fell short of the anticipated 374 bcf reduction, thus reducing worries over a tighter supply situation. Market pressure was also influenced by predictions of mild temperatures and decreasing heating demand over the next fortnight, following last week's severe Arctic conditions. Production is on the rebound, with output from the Lower 48 states increasing to approximately 106.6 billion cubic feet per day (bcfd) in early February, recovering from January's levels. Post-cold snap, storage levels have significantly dropped and are now approximately 1% below the seasonal average, a stark contrast to being 5% above average just last week. Concurrently, LNG export flows have surged to 18.4 bcfd in February, nearing record-breaking figures.