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Lean NatGas Injection Ties Record Storage; December Adds 7 Cents

Natural gas futures climbed higher Thursday morning after the Energy Information Administration (EIA) reported a storage injection that was somewhat less than what the market was expecting.

EIA reported a 52 Bcf injection in its 10:30 a.m. EST release, and the addition put inventories equal to the record high of 3,929 Bcf established in October 2012. December futures rose to a high of $2.352, and by 10:45 a.m. December was trading at $2.329, up 6.7 cents from Wednesday's settlement.

Prior to the release of the data, analysts were looking for an increase in the upper 50 Bcf area. PIRA estimated a 57 Bcf increase, and industry consultant Genscape calculated a 61 Bcf build. A Reuters poll of 23 traders and analysts showed an average 59 Bcf with a range of 52-69 Bcf.

Although storage is at a record, analysts see somewhat of a "tightening" market.

"The 52-Bcf net injection into natural gas storage for last week was the third consecutive bullish-side miss, suggesting either a tightening trend in the background supply-demand balance, or perhaps some difficulty in matching production flows with available remaining storage capacity. In any case, the market looks somewhat less oversupplied, a constructive development," said Tim Evans of Citi Futures Perspective.

Inventories now stand at 3,929 Bcf and are 371 Bcf greater than last year and 147 Bcf more than the five-year average. In the East Region 32 Bcf was injected, and the West Region saw inventories increase by 4 Bcf. Stocks in the Producing Region rose by 16 Bcf.

The Producing Region salt cavern storage figure was up 5 Bcf at 371 Bcf, while the non-salt cavern figure increased 11 Bcf to 997 Bcf.

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