Natural Gas Falls after EIA Reports Smaller-than-Expected Weekly Draw

The EIA reported that domestic supplies of natural gas fell by 59 billion cubic feet for the week-ended November 23. Analyst estimates varied ahead of the report with median estimates ranging from 63 Bcf to 82 Bcf.
James Hyerczyk
Natural Gas
Natural Gas

Natural gas futures are under pressure on Thursday after the release of a bearish U.S. Energy Information Administration (EIA) weekly storage report. The reported draw came in higher than the average, but well-below pre-report estimates.

At 1607 GMT, January Natural Gas is trading $4.524, down $0.175 or -3.72%.

The EIA reported that domestic supplies of natural gas fell by 59 billion cubic feet for the week-ended November 23. Analyst estimates varied ahead of the report with median estimates ranging from 63 Bcf to 82 Bcf.

Reuters estimated an average 77 Bcf pull for the week, with a range of minus 62 Bcf to minus 105 Bcf. Bloomberg predicted a median withdrawal of 82 Bcf, with estimates ranging from minus 60 Bcf to minus 88 Bcf. The ICE EIA financial weekly index futures settled Tuesday at a withdrawal of 65 Bcf. Energy Aspects issued a preliminary estimate for a 63 Bcf pull from U.S. gas stocks for this week’s report.

Last year, the EIA recorded a 35 Bcf withdrawal for the period, and the five-year average is a withdrawal of 49 Bcf.

Total stocks now stand at 3.054 trillion cubic feet, down 644 billion cubic feet from a year ago, and 720 billion cubic feet below the five-year average, the EIA said.

Increase in Weekly Jobless Claims Raises Red Flag

The number of Americans filing for unemployment benefits rose to a six-month high last week. This news raises concerns that the labor market could be slowing.

Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 234,000 for the week-ended November 24, the highest level since mid-May, the Labor Department said on Thursday. Claims have now risen for three straight weeks.

Economists polled by Reuters had forecast claims falling to 220,000 in the latest week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 4,750 to 223,250 last week.

Stocks Hit Session Low on Report Navarro Will be Attending Trump-Xi Talks on Trade

U.S. stocks fell to their session lows after the South China Morning Post reported that White House advisor Peter Navarro was attending the dinner between President Trump and Chinese leader Xi Jinping in Buenos Aires at the G20 summit.

Traders feel that his attendance will dampen hopes that a trade deal could be reached at the dinner given his longstanding hawkish tone on U.S.-China trade.

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