The U.S. Energy Department’s weekly inventory release showed that the decrease in natural gas supplies were in line with expectations. This, together with favorable weather forecasts, helped the commodity rebound off its 17-year lows.

But topping 2.4 trillion cubic feet (Tcf), natural gas inventories are still 41% above the 5-year average. As a result, prices are down significantly from the 2008 highs. With production remaining plentiful and expected to outpace demand for most of 2016, the commodity is likely to stay depressed for a while.

About the Weekly Natural Gas Storage Report

The Weekly Natural Gas Storage Report – brought out by the Energy Information Administration (EIA) every Thursday since 2002 – includes updates on natural gas market prices, the latest storage level estimates, recent weather data and other market activities or events.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of natural gas. It is an indicator of current gas prices and volatility that affect businesses of natural gas-weighted companies and related support plays.

Analysis of the Data: In-Line Decline

Stockpiles held in underground storage in the lower 48 states fell by 57 billion cubic feet (Bcf) for the week ended Mar 4, 2016, smack in the middle of the guided range (of 55–59 Bcf draw) as per the analysts surveyed by Platts, the energy information arm of McGraw-Hill Financial Inc. However, the decrease was lower than both last year’s drop of 174 Bcf and the 5-year (2011–2015) average shrinkage of 118 Bcf for the reported week.

The past week’s decline – the fifteenth successive withdrawal of the 2015-2016 winter heating season after stocks hit an all-time high in November 2015 – took the current storage level down to 2.479 Tcf. It is still up 911 Bcf (58%) from last year and is 727 Bcf (41%) above the five-year average.

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