October natural gas is expected to open 2 cents lower Thursday morning at $3.07 ahead of government figures anticipated to show well above normal inventory additions. Overnight oil markets fell.
Weather models overnight continued the pattern of very warm near-term temperatures, but data for early October showed greater cooling. "Above normal cooling demand continues to be the main impact driver for the balance of this week and marginally so into the first half of next week thanks to impressively warm conditions for the Midwest to East with continued heat in the South as well," said Matt Rogers, president of Commodity Weather Group.
"Chicago continues to break records in the short-term with warmer changes for the Midwest in both the one to five and six to 10 day periods (South is also warmer in the one to five day). The East and West Coasts are mostly flat/unchanged over the next 10 days, but the East Coast and South edge slightly cooler in the 11-15 day. By the first days of October, demand is generally low on both the cooling and heating demand side, so one needs to see really strong anomalies to generate anomalous notable demand."
Expectations for Thursday's Energy Information Administration storage report are for a build well above historical norms. Last year 54 Bcf was injected and the five-year pace stands at 73 Bcf. This week the numbers are coming in at the 90 Bcf level. Citi Futures Perspective calculates an injection of 84 Bcf and Stephen Smith Energy is looking for an 88 Bcf increase.
A Reuters poll of 25 traders and analysts showed an average 91 Bcf with a range between plus 84 Bcf and plus 100 Bcf.
In overnight Globex trading November crude oil fell 41 cents to $50.28/bbl and November RBOB gasoline fell a penny to $1.6037/gal.