In a U.S. pure fuel centered EBW Analytics Group report despatched to Rigzone by the EBW staff on Friday, Eli Rubin, an power analyst on the firm, warned of “faltering demand” heading into the President’s Day vacation weekend.
“The March contract examined as excessive as $3.316 yesterday earlier than promoting off after a bearish EIA [U.S. Energy Information Administration] storage shock, and forward of deteriorating heating demand into President’s Day vacation weekend and an 11 billion cubic foot per day drop into subsequent Wednesday,” Rubin mentioned in Friday’s report.
“The specter of chilly air in Western Canada and the Pacific Northwest transferring into the U.S. stays a main supply of help,” he added.
“If the market returns from the vacation weekend with out this menace materializing, nevertheless, sub-$3.00 per million British thermal items could also be in play because the yr over yr storage deficit flips to a 170 billion cubic foot surplus by late February,” he continued.
Within the report, Rubin went on to state that “steep storage refill demand east of the Rockies and free provide/demand fundamentals throughout current Marches might provide some medium-term help”.
He added, nevertheless, that “storage exiting March close to 1,800 billion cubic ft, with gathering manufacturing tailwinds and decelerating yr over yr LNG progress into mid to late 2026, counsel a bearish outlook for NYMEX fuel futures”.
In its newest weekly pure fuel storage report, which was launched on February 12 and included information for the week ending February 6, the EIA revealed that, in accordance with its estimates, working fuel in storage was 2,214 billion cubic ft as of February 6.
“This represents a web lower of 249 billion cubic ft from the earlier week,” the EIA highlighted within the report.
“Shares have been 97 billion cubic ft lower than final yr at the moment and 130 billion cubic ft under the five-year common of two,344 billion cubic ft. At 2,214 billion cubic ft, whole working fuel is inside the five-year historic vary,” it added.
Within the EBW report, Rubin mentioned the “249 billion cubic foot EIA report matched the Seventeenth-largest weekly EIA storage pull in historical past – and nonetheless got here in near 1.3 billion cubic ft per day looser than analyst consensus estimates”.
“The market rebalancing after Winter Storm Fern follows a sample of post-storm pipeline linepack decreases and industrial demand outages,” he added.
“Industrial demand outages are primarily positioned within the South Central, one in all bigger regional surprises in yesterday’s report. Each linepack and industrial outage components, nevertheless, are tougher to trace quantitatively with accessible information sources – and sometimes underweighted in analyst estimates,” he continued.
“The present 97 billion cubic foot U.S. storage deficit to year-ago values may shortly flip to a 170 billion cubic foot surplus inside the subsequent three weeks. The present 130 billion cubic foot storage deficit to five-year norms could also be erased over the following two storage experiences,” he went on to state.
In Friday’s report, EBW predicted a “watching early March climate” pattern for the NYMEX front-month pure fuel contract worth over the following 7-10 days and a “storage deficits provide help” pattern over the following 30-45 days.
EBW states on its web site that it supplies impartial knowledgeable evaluation of pure fuel, electrical energy, and crude oil markets. The corporate highlights on its web site that it has teamed up with DTN, which it describes as “the worldwide trade chief identified for hazardous climate detection and prediction, forecast modeling, choice analytics, GIS and interactive mapping”.
Rubin is described on EBW’s web site as “an knowledgeable in econometrics, statistics, microeconomics, and energy-related public coverage”.
“He’s instrumental in designing the algorithms utilized in our fashions, and in assessing the potential discrepancies between theoretical and sensible market results of fashions and historic outcomes,” the EBW web site goes on to state.
To contact the writer, e mail andreas.exarheas@rigzone.com
