US EIA data showed a natural gas storage change of -249 Bcf for the week ending 6 February. The market expected -256 Bcf.
The draw was 7 Bcf smaller than forecast. This means less gas was pulled from storage than expected.
Storage Report Implications
The 249 Bcf storage draw was smaller than the market expected. This points to weaker demand in the first week of February and a looser supply-demand balance. That is usually bearish for prices. We expect immediate downward pressure on the March and April futures contracts.
Inventory levels also support a bearish view. Total working gas in storage is now 2,341 Bcf, which is 235 Bcf above the five-year average for this time of year. This large buffer helps protect against supply disruptions and reduces the chance of a strong rally in the near term.
U.S. dry gas production also remains strong, near a record 106 Bcf per day. At the same time, NOAA forecasts warmer-than-normal temperatures across the eastern half of the U.S. over the next 6–10 days. Warmer weather usually lowers heating demand, which can add to price pressure. Given this setup, strategies that benefit from flat or falling prices may be more suitable.
With these conditions, traders may look to sell call options or use bear put spreads to take advantage of expected weakness. Still, it is important to watch LNG export demand. Feedgas flows to terminals are holding near 14 Bcf/d, which can support prices. A sudden geopolitical event that disrupts global LNG flows could also change the market quickly.
Risk And Positioning Considerations
Volatility can return fast. In winter 2025, a short but severe cold blast caused a sharp price spike and hurt many short positions. Because of this, holding some upside protection can make sense. Cheap, out-of-the-money call options can help hedge against a sudden late-February shift in weather, which remains a key risk.
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