Cold weather in January has wiped out the storage surplus and pushed natural gas prices higher in 2025. The latest weekly storage surveys show a sharp turn to deficits as we predicted in the Macro Supply & Demand Report, the first time in 2+ years that inventory has trailed the 5-year average.
The Energy Information Administration (EIA) reported a massive 321 Bcf storage withdrawal for the week ending January 24. The survey captured strong heating demand as a polar vortex plunged through the Lower 48, bringing sub-zero temperatures to many markets. Wells in several basins froze over in the frigid temperatures, curtailing some production and exacerbating the demand for storage gas.
EIA yesterday (Feb. 5) reported another robust storage withdrawal of 174 Bcf for the week ending January 31. The latest EIA survey leaves working gas inventories at 2,397 Bcf, or 111 Bcf below the 5-year average.
The figure comes from East Daley Analytics’ January Macro Supply & Demand Report, which anticipated the turn to a deficit in the Jan. 24 weekly EIA survey. We predict residential and commercial demand will average 50.2 Bcf/d for the month, the second-highest level ever behind January ‘14. Total Res/Com demand for the winter season averages 39.6 Bcf/d, or 2.6 Bcf/d greater than last winter in our outlook.
EDA anticipates spending all of 2025 in deficit conditions as demand grows from new LNG projects and producers play catch up. As we inch closer to a more balanced market in 2026, we see marginal surpluses arising in May ‘26 that could last for the balance of the year.
The significant cold in January has pushed up futures prices along the curve. East Daley sees this as a necessary adjustment, as we’ve forecasted gas prices in 2025 would rise to near $4/MMBtu since early 2024 (our January ‘24 forecast predicted Cal ‘25 would average $3.90).
Reach out to East Daley to learn more about the Macro Supply & Demand Report. – Jack Weixel.
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