October natural gas is expected to open a penny lower Thursday morning at $2.56 as traders anticipate what might be a triple-digit storage build not only this week but in succeeding weeks as well. Overnight oil markets fell.
Moderating late-summer weather has made heftier storage builds easier, and indications are that Thursday's build will be significantly greater than last week's 73 Bcf injection. ICAP Energy calculates a 100 Bcf increase, and Tim Evans of Citi Futures Perspective is up at 108 Bcf. A Reuters survey of 22 traders and analysts revealed an average 96 Bcf with a range of 83 to 108 Bcf. Last year, 96 Bcf was injected and the five-year average comes in at 83 Bcf.
Supplies currently stand at 3,334 Bcf, and to reach the marquee level of 4 Tcf, and a new record, injections a touch over 95 Bcf will be necessary over the next seven weeks.
Analysts are confident that their estimates in the 95 to 100 Bcf range will be right on target.
"We've seen little or no indication of a surprise this week; however, the spread between the three categories we track is somewhat elevated: 2.85 [Bcf]," said John Sodergreen, editor of Energy Metro Desk. "Oddly high. If there is a surprise, it would likely be to the high side, we think. Our GWDD forecast came in at 96 Bcf. So 96 to 101 should be right on the money this week, barring any reclassifications, revisions or incomprehensively uneconomic maneuvers at the hands of storage operators. With roughly seven (maybe eight) weeks to go in the storage season, we'd say we're well on our way to breach the 4 Tcf mark this year."
Weather forecasts remained benign, with no indication that a pool of cool, Canadian air is about to make its way south anytime soon. Commodity Weather Group in its Thursday morning report said, "Another day of mostly small adjustments are noted with some slightly warmer changes for the Midwest to East Coast in the six-10 day and slightly cooler East and warmer West for the 11-15 day range. This continues to be a low-demand pattern situation as late-season cooling demand fades and early-season heating demand starts on a much slower pace.
"Like [Wednesday], the models are at least in general agreement on a warm-sided pattern even if the American ensembles are never quite as intense as the European and Canadian," said Matt Rogers, president of the firm.
In overnight Globex trading November crude oil fell 17 cents to $44.31/bbl and November RBOB gasoline eased a penny to $1.3585/gal.