Natural gas fundamentals are looking strong. The Energy Information Administration reports, “That last winter the US saw larger-than-average U.S. natural gas withdrawals from storage. EIA says that significantly colder-than-normal temperatures in the Lower 48 states in late January through mid-February resulted in increased heating demand for natural gas in the United States, despite an otherwise warmer-than-normal winter. As a result, the winter had larger-than-average winter natural gas withdrawals.
Before the cold snap, winter temperatures had been relatively mild, but a combination of increased heating demand, record liquefied natural gas (LNG) and pipeline exports and decreased natural gas production contributed to the withdrawal activity during February. Working natural gas in storage in the Lower 48 states as of March 31, 2021—the traditional end of the heating season that began November 1, 2020—totaled 1,778 billion cubic feet (Bcf), 1.4% less than the five-year (2016–20) average for the end of the heating season, according to EIA’s Weekly Natural Gas Storage Report released on April 8. Net withdrawals from working natural gas inventories during the 2020–21 heating season exceeded the five-year average by 10.6%. This means that we should see tightening supply into summer. Time to get some calls or start to build a long position.