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HFI Research

Where Is The Bottom For Natural Gas?

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HFI Research
Feb 13, 2024
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Winter is almost over and Mother Nature decided not to help. With the latest ECMWF-EPS update, it is clear that warmer-than-normal temperatures will return and storage withdrawals will remain dismal.

TDDs

6-10 Day

10-15 Day

15-Day

With this update, it is clear that storage by April will finish above ~2 Tcf unless a cold blast comes out of nowhere. Considering the elusive Alaska ridge is not present in the latest 15-day outlook (red in Alaska is not there, it's dark blue, which is bearish), there's no risk of a colder-than-normal weather event.

And looking at our storage projections, the next 5 natural gas storage reports will show withdrawals of 233 Bcf less than the 5-year average.

On an implied balance basis, we are ~6.65 Bcf/d oversupplied. Even if we adjust for the bearish weather factor, we have the market oversupplied today by ~2 Bcf/d.

This puts storage comfortably above ~2 Tcf.

Where is the bottom?

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