Natural gas futures gained ground after the Energy Information Administration (EIA) reported a storage build that was less than what traders were expecting.
Utilizing its new five-region format (see Daily GPI, Sept. 30), EIA reported a 15 Bcf injection in its 10:30 a.m. EST release. The addition put inventories precisely at the marquee level of 4 Tcf and surpassed the record high of 3,978 Bcf, recently revised to 3985 Bcf, established with the Nov. 6. report. December futures rose to a high of $2.370, and by 10:45 a.m. December was trading at $2.366, up 1.9 cents from Wednesday's settlement.
Prior to the release of the data, analyst estimates were widely varied. Industry consultant Genscape was looking for an increase of just 8 Bcf, and a Reuters poll of 23 traders and analysts showed a range to 5 to 50 Bcf with an average 18 Bcf. PIRA Energy calculated a 22 Bcf build.
The revision to 3,985 Bcf of the prior week's 3,978 Bcf threw something of a monkey wrench in trader's calculations, but EIA said that the differences were due to internal massaging of the data by EIA and not any change in the data they receive from those they survey.
"The new format really didn't change anything, but it should refine some of the ranges, because we were getting ridiculous ranges of the estimates," a New York floor trader told NGI. "The high range on today's estimates was plus 50 Bcf. How can you be that far apart? I had heard earlier in the week plus 5 Bcf to plus 9 Bcf, and I was more on the lower end."
Tim Evans of Citi Futures Perspective said the 4 Tcf level was widely anticipated. "We see a further minor 7 Bcf build for the week ending Nov. 20 to be followed by some robust storage withdrawals as the forecast cycle of cold has its impact on heating demand."
The new five-region format is designed to further enhance market transparency and acknowledge a new market configuration featuring the a newly formatted East Region along with four others. Inventories now stand at 4,000 Bcf and are 404 Bcf greater than last year and 207 Bcf more than the five-year average.
In the East Region 5 Bcf was injected, and the Midwest Region saw inventories increase by 7 Bcf. Stocks in the Mountain Producing Region fell by 3 Bcf, and the Pacific Region saw supplies slide by 1 Bcf. The South Central Region, similar to the former Producing Region, added 7 Bcf.
Salt cavern storage was up 4 Bcf at 377 Bcf, while the non-salt cavern figure increased 3 Bcf to 970 Bcf. Curiously, for the week ended Nov. 6 EIA reported non-salt cavern storage at 1,010 Bcf.