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While some colder trends emerged in updated models, they weren’t aggressive enough to push prices through resistance. Traders are watching next week’s forecast closely—if the colder push extends deeper into the Midwest and East, heating demand could surge, supporting a bullish case. However, if mild weather persists, the upside potential remains capped.
EIA Storage Deficit: Tight Enough to Matter?
The latest EIA storage report showed a 174 Bcf draw, bringing total working gas to 2,397 Bcf—which is 208 Bcf lower than last year and 111 Bcf below the five-year average.
This suggests a tightening supply picture, particularly in the Midwest and South Central regions, where the largest drawdowns occurred. Salt storage in the South Central region saw an outsized 12 Bcf decline, raising concerns about near-term supply volatility.
For a bullish breakout, storage draws must accelerate beyond seasonal norms, signaling a real supply strain. However, if withdrawals stay in line with expectations, the market may struggle to sustain higher prices.
China’s Tariffs: Will U.S. LNG Exports Take a Hit?
China announced a 15% tariff on U.S. LNG, effective February 10, in response to new U.S. trade measures.
While this doesn’t directly impact domestic prices, it raises long-term concerns about U.S. LNG export demand. If China cuts back on U.S. LNG purchases, global supply could build up, keeping prices in check.
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