The growing popularity of gas in the US and Canada will continue to result in high drawdown rates for the rest of the withdrawal season.
GGA estimates the US will end the 2016-2017 gas withdrawal season with 52.6 bcm of gas in storage, much lower than the 70.6 bcm it had at the end of the previous withdrawal season. Consequently, storage operators will come under pressure to refill stocks when the 2017 gas injection season begins in April. Growing gas demand, together with falling output in the state of Louisiana – which is home to the Henry Hub pricing point – will increase the state’s need for withdrawals even during the summer; a feature that has become common in the past few years. This in turn will support Henry Hub prices during the summer, even though overall US gas production is expected to grow in 2017.