The Platts pre-report analyst survey suggests US EIA data will show a 43-48 Bcf reduction in natural gas stocks for the latest reporting week

Washington, DC - November 25, 2008

The US Energy Information Administration on Wednesday is expected to report a reduction of between 43 billion cubic feet (Bcf) and 48 Bcf in natural gas storage inventories for the week that ended Friday, November 21, according to a Platts survey of analysts. EIA is releasing the report a day early because of the Thanksgiving holiday.

In the same week a year ago, EIA reported a net drawdown of 8 Bcf, while the five-year-average drawdown for the week is 14 Bcf. As a result, the 51-Bcf deficit to last year's inventory is likely to expand, while the 140-Bcf surplus over the five-year-average should shrink.

A withdrawal above expectations, or above the year-ago level and/or five-year average, could push natural gas prices higher because it means less gas is available for consumption during the winter heating season.

The broader range of analyst projections for the most recent week spanned from withdrawals of 10 Bcf to 67 Bcf.

Subash Chandra, an analyst with Jefferies & Company, said US heating degree-days last week were higher than both the prior week and the comparable week of 2007. As a result, he said the year-over-year deficit could widen to over 100 Bcf.

Despite projections for a relatively large drawdown, however, FTI Consulting analyst Andrew Weissman said the larger-than-anticipated 16-Bcf storage build EIA reported for the week that ended November 14 indicates that overall gas demand may be trending lower as the economy weakens.

"If the expected withdrawal this week is much smaller than expected, it could lead to a major sell-off" in the gas market, Weissman said.