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Last week natural gas bulls got excited over the fact that this year marks the earliest start to the annual inventory drawdown since the government started keeping storage statistics in 1994. While decreases in inventory are certainly better for pricing than increases, the chart below shows that inventories will need to be worked off at a much faster rate before any meaningful supply issue arises. In fact, even if the US faces a winter drawdown inline with its most severe drawdown ever (’02-’03), the net result would be a spring inventory level only slightly below.

click to enlarge

natural gas inventories

Source: Natural Gas Inventories Not Pressuring Supply in Meaningful Way