Welcome to the storage forecast edition of Natural Gas Daily!
We expect a 0 Bcf in the storage report for the week ended February 24. A storage report of 0 Bcf would be compared to a -67 Bcf draw last year and a -132 Bcf draw for the five-year average. Our storage forecast was revised lower by 1 Bcf from last Friday as we revised power burn demand slightly lower.
Our storage forecast this week is lower than the consensus estimates we've seen, and ICE settlement data pins the February 24 storage at +4 Bcf.
As of the latest weather forecast updates, our April EOS has been revised higher on the bearish March weather forecasts. However, as you can see in the ICE settlement report, the market has repriced the March 10 storage figure from -11 Bcf to -45 Bcf as we have repeatedly said that the figure was far too bearish.
This week's EIA storage report will be the culminating result of the consistently bearish weather revisions we saw throughout February. Weekends after weekends, the original forecast called for February 24 week to show normal GWHDD (gas weighted heating degree days), but was soon revised warmer, and warmer, and warmer. GWHDD compared to the 10-year average for the February 24 week is 45% below, and that explains why it's such a bearish relative storage report.
However, despite this EIA storage report being overwhelmingly bearish on an absolute level, we think the disappointment is likely priced in. If storage figures come close to our estimate of "no change", there could be a positive surprise.
Overall, we expect the week ended February 24 storage report to be drastically below the five-year average. We expect 0 Bcf change to the storage.
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