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Bulls Stirring as Lean Storage Report In Play

August natural gas is expected to open 4 cents higher Thursday morning at $2.83 before a government report that is expected to show additions to supply far less than historical averages. Overnight oil markets rose.

Analysts aren't expecting much in the way of surprises in the Energy Information Administration (EIA) storage report. All indications are that the plump surpluses to both last year and the five-year average will continued to be whittled away. Last year, a hefty 83 Bcf was injected and the five-year pace stands at 77 Bcf.

"This  week's  report should  be  fairly  straightforward," said John Sodergreen, editor of The Desk, a newly reformatted version of Energy Metro Desk." Next week, considering  the  holiday  effect, should be a little dicey. Recall that last year, the two reports following the Fourth holiday  (9th and the 16th of July reports) produced a pair of higher-than-expected reports out of EIA.

"Last week's weather was 22% warmer than the same week last year and 8% warmer than the  five-year average. Since May, weather has been roughly 6-7% warmer than last year and the five-year average."

Sodergreen's survey showed an average 44 Bcf injection, as did IAF Advisors. Citi Futures Perspective calculated an increase of 46 Bcf and a Reuters survey of 16 traders and analysts revealed an average 43 Bcf with a range of 35 Bcf to 47 Bcf.

Gas buyers in the spot market should have their hands full. Near-term weather patterns look challenging. "Hot and muggy conditions will persist across much of the southern two-thirds of the U.S. through the end of the week," the National Weather Service said Thursday morning. "Temperatures are expected to exceed 100 degrees, especially across western Texas, eastern New Mexico into Oklahoma. Scattered showers and thunderstorms will be possible from the central Gulf Coast to the Southeast and northward to the Mid-Atlantic region."

In overnight Globex trading August crude oil gained 46 cents to $47.89/bbl and August RBOB gasoline added 3 cents to $1.4637/gal.

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