The Platts pre-report analyst survey suggests US EIA data will show a 5-10 Bcf draw in natural gas stocks for the latest reporting week

Washington, DC - March 25, 2009

The U.S. Energy Information Administration (EIA) on Thursday is expected to report a net withdrawal from the nation's natural gas storage inventories of between 5 billion cubic feet (Bcf) and 10 Bcf for the week that ended Friday, March 20, according to a consensus estimate of a Platts survey of analysts. The full range of estimates was particularly wide, running from a draw as large as 44 Bcf to an injection of 20 Bcf.

A drawdown within expectations would be much smaller than last year's 43-Bcf withdrawal and the five-year-average pull of 49 Bcf, according to EIA. As a result, the 326-Bcf year-over-year surplus and the 228-Bcf surplus over the five-year average each would expand.

For the week that ended March 13, EIA estimated a withdrawal of 30 Bcf, a slightly larger-than-anticipated drawdown that prompted a sharp rebound in New York Mercantile Exchange's natural gas futures prices.

"The price action over the past week might seem to indicate a newfound optimism about the health of demand," analysts with Barclays Capital said. "However, we do not draw a bullish conclusion from recent market data, including last week's storage number."

Barclays said it expects industrial demand will average below 2008 levels for the year. In addition, the firm believes supply/demand trends could lead to a record pace of storage builds in the injection season ahead.

But FirstEnergy Capital analyst Martin King said a few supportive factors are beginning to filter into the market, leading to a "small but noticeable trend" toward a slightly tighter supply/demand balance.

In particular, King said the power sector has begun using gas more aggressively over the past few weeks, given that prices are running at "some of the cheapest Btus around."