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Storage Revision, Hefty Injection Help Push Futures Lower

Natural gas storage revisions, a sizeable injection and continued weakness in crude futures teamed up Thursday to pull the June natural gas futures contract lower in its first regular session as prompt month. June natural gas hit a low of $6.780 before settling at $6.805, down 46.6 cents on the day. On Friday, June natural gas closed another quarter lower at $6.555. The June contract has shed a total of $1.855 off of its price over the last seven consecutive regular sessions.

June natural gas futures traded lower in Wednesday night Access trading as rumors of a bearish natural gas storage revision swirled throughout the industry. The rumors turned out to be true as the Energy Information Administration reported that 80 Bcf was injected for the week ended April 21 and that 10 Bcf was added to the injection figure for the week ended April 14.

The EIA said working gas levels rose 80 Bcf last week to 1,851 Bcf on Friday, April 21, compared to 1,771 Bcf a week earlier. The 1,771 Bcf figure was revised upward by 10 Bcf from the 1,761 Bcf EIA reported last week. EIA said the revision reflected submissions of data and reclassifications of base gas to working gas by one or more respondents.

"I think Dominion made an announcement that they underreported last week," said Ed Kennedy of Commercial Brokerage Corp. "But the thing is, [the net storage injection] was right in line with what people were looking for. ICAP had 81 Bcf, and those are the people who actually trade; that's why we are not seeing much of a response to it."

Dominion spokesman Dan Donovan confirmed that Dominion revised last week's storage number by 5 Bcf. "On Tuesday, we revised our number and reported it to the EIA," Donovan said. "I guess the EIA saw fit not to revise it midweek and waited until Thursday."

CenterPoint Energy told NGI that it revised its storage number for the previous week by 3 Bcf. "The 3 Bcf amount was really no more than reclassifying cushion gas into working gas," said Leticia Lowe, a spokeswoman with CenterPoint Energy.

"The revised stock estimate for April 14 reflects resubmissions of data and reclassification between base gas and working gas reported by one or more responders," an EIA spokeswoman said. "The EIA does not divulge any detailed information regarding revisions, including the number of companies, which may compromise the confidentiality of a respondent."

The addition of a net 90 Bcf to working gas levels compared to what was announced last week, leaves storage 32% higher (445 Bcf) than the same time last year and 62% above the five-year average. Working gas levels in the key eastern consuming region are 48% higher than they were at the same time last year.

The 80 Bcf injection for the week ended April 21 beat last year's 70 Bcf injection and the five-year average build of 58 Bcf. For the week, the EIA reported a 49 Bcf injection in the East, a 24 Bcf injection in the Producing region and a 7 Bcf injection in the West.

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