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Does Storage Data Support a Bullish Case?
The latest EIA report released on Thursday showed a 174 Bcf draw from storage for the week ending January 31, exceeding some expectations but aligning with the five-year average. Total working gas now stands at 2,397 Bcf, which is 208 Bcf lower than a year ago and 111 Bcf below the five-year average.
While this points to tightening supply, inventories are still within historical norms, limiting immediate upside pressure. Regionally, the biggest declines came from the Midwest (-56 Bcf) and South Central (-47 Bcf), reflecting higher heating demand. The South Central salt storage saw a sharper decline of 12 Bcf, which could introduce supply volatility in the weeks ahead.
Colder Temperatures Ahead, but Will Demand Spike?
The February 6–12 forecast shows a stark weather divide. The northern third of the U.S. will see cold to very cold conditions, with snow and temperatures ranging from below zero to the 30s. Meanwhile, the southern two-thirds will remain mild, with highs between the 50s and 80s, especially across Texas. However, colder air is expected to push south early next week, potentially driving higher demand.
Forecasts from NatGasWeather indicate light national demand through the weekend, followed by a sharp increase to high demand levels next week. If the colder trend holds into mid-February, it could lend some support to prices. However, traders remain cautious, as recent mild weather has kept withdrawals in line with seasonal expectations rather than triggering a major rally.
How Are Chinese Tariffs Impacting LNG Markets?
On Monday, February 10, China is set to impose a 15% tariff on U.S. LNG, adding a layer of uncertainty to global trade flows. While experts see minimal short-term price impact, a prolonged trade dispute could shift investment and supply growth toward other regions.
Global LNG markets are already dealing with shifting demand patterns, and any sustained trade war could make U.S. LNG projects less competitive. This adds another layer of uncertainty to long-term pricing and supply strategies.
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