Where Is The Bottom For Natural Gas?
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.