US Energy Information Administration data showed a natural gas storage change of -144B for the week of 13 February.
The forecast was -146B, so the reported draw was 2B smaller than expected.
Storage Draw: Interpreting Market Impact
The 144 billion cubic feet natural gas storage withdrawal was slightly smaller than the 146 billion expected. This suggests demand was weaker than the market anticipated. That is bearish because it leaves more gas in storage than traders had priced in, which can push prices lower in the near term.
In the bigger picture (early 2025), this report also supported an already oversupplied market. Total inventories were still well above 2,000 Bcf, more than 15% above the five-year average for mid-February. With that kind of buffer, the market can absorb small, weather-driven demand spikes.
That winter’s core story was record production—often above 100 Bcf per day—alongside generally mild weather. Even with strong LNG export demand, supply was still more than enough. This storage result reinforced the idea of a weak price environment.
For derivatives traders, this supported a bearish bias. One approach was buying puts on April and May contracts to benefit from further downside as winter heating demand faded. Another approach was selling out-of-the-money call spreads to profit if prices stayed flat or drifted lower.
Futures traders could treat rallies as chances to start or add to shorts. Technical resistance remained a factor, and a move below the key $2.50/MMBtu level looked more likely during that period. The March–April spread was also worth monitoring for signs of added weakness.
Key Risk Scenario: Weather Shock
The main risk to this view was a late-season arctic blast that sharply raises heating demand. Even though early-2025 weather models leaned mild, a sudden shift could trigger a fast short-covering rally. Any bearish position should be managed with clear risk limits.
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