September natural gas is set to open 4 cents lower in spite of expectations of a government report anticipated to show one of the leanest storage builds of the season. Overnight oil markets fell.
Futures traders are on the lookout for one of the thinnest storage builds of the season in Thursday's Energy Information Administration (EIA) inventory report. Last year, a stout 83 Bcf was injected, and the five-year pace is 53 Bcf. IAF Advisors of Houston calculates an increase of 39 Bcf, and Genscape is looking for a 40 Bcf build. A Reuters survey of 27 traders and analysts revealed an average 42 Bcf with a range of 38 to 47 Bcf.
The hot, humid weather of last week prompted power loads not seen in three years and is expected to generate the thinnest storage build in more than a month. "Power demand matched the all-time weekly high during the week, averaging nearly 35.7 Bcf/d and set a new single-day record of 38.4 Bcf/d, which is more than 0.6 Bcf/d above the previous record which was set in 2011," Bentek Energy said in a report.
Bentek is expecting a build of 36 Bcf utilizing its flow model, and according to its data, the burn cut across all three regions and the East and Producing regions took the biggest hits injection-wise. It hasn't been since 2012 that power burn has averaged above 35.7 Bcf/d, and the elevated power burn pushed total demand to a season-high 66 Bcf/d, the company said.
Weather models trended cooler overnight. WSI Corp. in a Thursday morning report said, "[Thursday's] forecast trended several degrees colder over the East, whereas a shade cooler across ERCOT when compared to yesterday's forecast. CONUS PWCDDs are down -6 PWCDDs, sitting at 49.7 PWCDDs now.
"Forecast confidence is considered near average standards regarding the large-scale pattern across the Lower 48 but has fallen to below average standard over the SPP and ERCOT pools."
In overnight Globex trading September crude oil dropped 52 cents to $44.63/bbl and September RBOB gasoline shed 2 cents to $1.6506/gal.