Into The Vortex – EIA Reports Natural Gas Draw of -79 Bcf in Storage

Natural gas prices volatility continues with uncertainty in Europe. US prices have been fluctuating between domestic weather and European supply concerns. Geopolitical concerns are supporting gains in natural prices with Europe’s dependence on Russian gas after Russia invaded Ukraine and could potentially restrict gas flows to Europe. Last week EIA reported a higher-than-expected draw of -79 Bcf of working gas in storage. With the global energy crisis LNG exports continue to grow but we balance supply shortages with deliverability.

Into The Vortex Contents

Click on the links below to navigate to the relevant section.

  1. EIA Natural Gas Storage Forecast and Analysis
  2. Natural Gas Quick Summary
  3. Rig Watch
  4. Weather
  5. LNG and Export Watch
  6. Natural Gas Import Watch
  7. Natural Gas Demand Watch
  8. Nuke Watch
  9. Natural Gas Futures Technical Analysis
  10. Option Volatility and Gamma
  11. DCOT Report

EIA Weekly Storage Report

  • Report Date:3/3/2022 Via
  • Release Time: Thursday 3/10/2022 10:30 a.m. ET
  • Market Expectations
  • Actual -79 Bcf Prior -124 Bcf
  • Consensus Forecast -73 Bcf
  • Cons. Range: -68 to – 87 Bcf
  • Last Year: – 16 Bcf
  • 5 Year Average: 65 Bcf
  • Estimates submitted to Bloomberg showed a median prediction for a 73 Bcf decrease for last week. Withdrawal predictions ranged from 68 Bcf to 87 Bcf.
  • Reuters’ poll spanned forecasts for withdrawals of 53 Bcf to 87 Bcf, with a median estimate of 73 Bcf.
  • The Wall Street Journal’s survey landed an average pull of 74 Bcf. Estimates ranged from decreases of 69 Bcf to 87 Bcf.
US Natural Gas Storage Stage


Working gas in storage was 1,519 Bcf as of Friday, March 4, 2022, according to EIA estimates. This represents a net decrease of 124 Bcf from the previous week. Stocks were 281 Bcf less than last year at this time and 290 Bcf below the five-year average of 1,809 Bcf. At 1,519 Bcf, total working gas is within the five-year historical range.

Last Week’s Report -124 Bcf #TCNG

Bespoke forecast a pull of 67 Bcf with the next EIA report, followed by a 45 Bcf decrease the week after. For the final week of March, the firm expects an injection of 4 Bcf.

Broken down by region

  • South Central region -38 Bcf decrease -26 Bcf in nonsalt facilities and -12 Bcf in salts
  • Midwest -40 Bcf decrease
  • East -41 Bcf decrease
  • Mountain -3 Bcf decrease
  • Pacific -2 Bcf decrease

Current Storage Level vs. Last Year; 5-Yr

  • Current Storage Level: 1519 Bcf
  • Storage 2020/Same Week:  1,800 Bcf
  • 5Yr Avg/Same Week: 1,809 Bcf
EIA Storage Report
us natgasl locations

via Brynne Kelly @BrynneKKelly

Global Natural Gas Quick Overview


Via Ole S Hansen @Ole_S_Hansen


Natural Gas Market Price Influence Factors

Bearish Factors Include

  • Economic damage and reduced natural gas demand caused by the Covid pandemic,
  • Warm U.S. winter that resulted in weak demand for natural gas for heating.
  • Over long spec positions
  • Expectations that the high level of oil prices would increase shale drilling and natural gas extraction as a by-product

Bullish Factors Include

  • Record foreign demand for U.S. nat-gas as flows to U.S LNG export terminals on April 18 rose to a record 11.921 bcf (data from 2014) and after U.S. LNG exporters loaded a record 81 cargoes in November, breaking the previous record of 75 set January of 2020,
  • Expectations that the low level of oil prices will reduce shale drilling and natural gas extraction as a by-product
  • Tighter U.S. nat-gas supplies that are down -14.8% y/y and -2.6% below their 5-year average.
  • High power burns
  • Perception that gas supply and demand are more inelastic than ever before.
  • Over short spec positions

Rig Watch 

Baker Hughes active rigs total in the U.S. onshore and Gulf of Mexico (GOM)

  • US Baker Hughes Rig Count: 663 (est 654; prev 650)
  • Oil Rig Count: 527 (est 523; prev 519)
  • Gas Rig Count: 135 (est 131; prev 130)

US Oil Rigs w/w changes by key shale basins

  • Permian +6 to 316
  • Eagle Ford +2 to 47
  • Williston unchanged at 33
  • Cana Woodford unchanged at 28
  • DJ Niobrara unchanged at 14

“Rig activity…would need to increase by about 36 weekly through year-end to reach a sustainable plateau to hold current oil volumes in 2022.” –Mizuho via Reuters 12/17/21

Comments by executives of multi-basin super independent EOG Resources Inc. mirrored those for many Lower 48 management teams.

“We’re not going to grow until the market clearly needs the barrels,” EOG President Ezra Yacob told analysts during a call Thursday. “We’re committed to staying disciplined. Currently, we want to see demand return to pre-Covid levels.”

Talking About The Weather

Gulf of Mexico

Gulf of Mexico Live Weather Report

European Energy Crisis

The energy crisis pounding the world with unheard of prices was impacting the domestic pricing. In Europe we are seeing up near record highs again. U.S. fundamentals only have the domestic gas market in bear territory with mild weather and low demand.

Europe’s dependence on Russia’s gas in one map via @michaeltanchum

Back to the panic levels of October.

  • Dutch TTF natural gas closes at €105.77 per MWh (**3rd highest ever settlement**).
  • UK NBP closes at 268.80p per therm (3rd highest too).
  • European gas inventories have fallen to a level typical of mid-January

In the EU markets the energy crisis is deepening with prices soaring with an unplanned outage cutting supplies from the giant Troll field in Norway. Coming on top of geopolitical worries, freezing cold weather and dwindling stocks. Emissions trades up to compensate for higher coal demand


La Nina



U.S. Climate Prediction Center said Thursday there is a 53% chance that La Nina conditions could persist through the summer and a 45% chance of those conditions carrying into next fall.  

This raises the likelihood of Atlantic hurricanes, which could disrupt natural gas operations on the Gulf Coast late in the summer and early fall. La Nina conditions tend to allow more tropical systems to strengthen into hurricanes, the forecaster said. 

The phenomenon begins when the atmosphere reacts to a cooler patch of water over the Pacific Ocean.

Paths of Recent Gulf Hurricanes


Technical Analysis via KnovaWave 

Henry Hub Natural Gas Futures Weekly Chart Outlook via @KnovaWave

Daily: US Natural Gas completed 3 waves correcting the daily 8/8 spit correction to 7/8. This was in turn correcting the daily 8/8 spit after a classic euphoria wave 5.Two clear alternatives, we are correcting the highs 5 or that was a 3 and we go higher. We closed right at the Tenkan which is our pivot next week. Meaning that 3 was either an a i or iv– impulse in a nutshell.

The Cloud top after broke Kijun and Tenkan with a kiss of life. Meaning that 3 was either an a i or iv– impulse in a nutshell. Prior to this move the adjunct failure of the 50dma and Tenkan opened up the retest of 3.80-3.60 last time which fueled this week’s move higher. From there we fell sharply to the Kijun, A completion of 4 (bear) or (i) of 5 (bull)

Notice the fractals of the move after completing the C of 4 bullish scenario played out the consolidation phase since it completed its IV (Bull Case) last year since then a series of 3 waves. For the bulls all this needs to hold for the highs to be a (iii) looking at possibilities we have the 161.8% at 7.026 if we get ‘silly’ 50dma support.

Like the larger wave on the way up it accelerated through previous highs (flat topped triangle energy) and over the resistance at 8/8 and new highs. We successfully tested that break in a pennant ABC. Previous highs (flat topped triangle energy) and 8/8 and new highs underscore the structure that fed the move and is key longer term. 

Weekly:  Another sharp reversal, like the previous impulsive spikes. We saw a false break of the Kijun to close back at the Tenkan. This move isa fractal of the classic double top playing out after a spit of the weekly Kijun was sent back off Tenkan only to reverse all the way to spit the 50wma for the energy needed. Resistance is Kijun and Murrey Grid. The Natural gas rebalanced after continued to fail and retrace with impulse after reaching its major target, the double top potential from 2014 which equated nicely to over 8/8 Weekly and showed true impulse off that to rebalance Chikou. It’s now a question of degree, 3 or 5? Impulse just shy of the 8/8 and Tenkan confluence. A question of continuation with the 50wma as resistance and cloud as support.

Natural gas futures Weekly
NG W 10 8 2021 2014 2021 double top

  Natural Gas Production


EIA forecast in Feb 17 STEO U.S. natural gas marketed production will increase to an average of 104.4 billion cubic feet per day in 2022 and then to a record-high 106.6 billion cubic feet per day in 2023.

Around 97% of production over the next two years will come from the Lower 48 states (L48), excluding the Federal Offshore Gulf of Mexico (GOM). The other 3% will come from Alaska and the GOM.

U.S. natural gas production growth will primarily come from the Appalachia region in the Northeast, the Permian region in western Texas and southeastern New Mexico, and the Haynesville region in Texas and Louisiana. EIA forecast that the Permian region will contribute 2.2 Bcf/d to production growth in 2022 and 1.2 Bcf/d in 2023.

Natural Gas Exports Watch



Natural Gas feed to LNG facilities Sabine Pass, Cameron, Elba Island, Cove Point & Corpus Christi

US Gulk Coast LNG Netbacks

  ++Charts via RonH @RonH999 – Visit Ron for daily updates 

U.S. liquefied natural gas exports were at record high levels in the first half of 2021


Natural Gas Mexican Exports Watch

via RonH Energy

US natural gas exports to Mexico established a new monthly record in June 2021

Mexico pipeline exports



Natural Gas Canada Import Watch

Source via RonH Energy

Canadian imports

Natural Gas Demand Watch


via RonH Data ‏@ronh999

Natural Gas Nuclear Power Watch

Source: via RonH Data ‏@ronh999

ALERT Three Mile Island nuclear shut down permanently on Friday afternoon 9/292019.


Natural Gas Options Structure – Volatility (COT)




Natural Gas Futures Commitment of Traders

 Disaggregated Commitment of Traders (DCOT) via RonH Data ‏@ronh999 @ole_s_hansen

Latest ICE and CFTC Open Interest Data: 


Natural Gas DCOT futures only managed money traders WoW change

(Note at NG peak Highest Longs Ever 87% (since 2006) Lowest Longs 2020 24%)

  • For week ending March 11
  • Natural Gas DCOT futures only managed money traders 
  • WoW change -340 longs,
  • +12,630 shorts,
  • -12,970 net change,
  • 48.3% net long

Understanding DCOT Reports 

Read Understanding Commitments of Traders Reports – COT, TFF and DCOT to help understand the disaggregated reports (DCOT) and how they break down the reportable open interest positions into four classifications:

1. Producer/Merchant/Processor/User 2. Swap Dealers 3. Managed Money 4. Other Reportables 

Sources: TradersCommunity, EIA, RonH Energy, The Fundamental Edge, KnovaWave

From The TradersCommunity US Research Desk