December natural gas is expected to open 7 cents lower Thursday morning at $2.62 as traders continue to juggle ongoing warmth, which now looks likely to push injections through November, and weekly storage figures likely to show storage at all-time record levels. Overnight oil markets were mixed.
Forecasts overnight turned a little cooler, but the prevailing pattern of unseasonal warmth continues. "[Thursday's] forecast is generally a bit cooler, except for the south-central states for days 11-14," said WSI Corp in its Thursday morning report. "CONUS GWHDDs rebounded back up by five for those days and are now forecast to be 79 for the period. These are 24.2 below average.
"The timing of storm systems may cause the forecast to waver in either direction, [and] the GFS [Global Forecast System] was discounted, but it depicts more blocking and offers a colder risk over the eastern half of the nation."
Any kind of colder risk has yet to show up in weekly storage data. Estimates of Thursday's Energy Information Administration inventory injections show increases in line with last year but ahead of the five-year average. Storage now stands at 3,963 Bcf, and only about 50 Bcf is needed to surpass last year’s record storage of just over 4 Tcf.
Last year, 55 Bcf was injected and the five-year pace stands at 38 Bcf. PIRA Energy estimates an increase of 48 Bcf while Ritterbusch and Associates calculates a 58 Bcf build. A survey by Reuters of 19 industry cognoscenti revealed an average 53 Bcf with a range of 45 to 65 Bcf.
Industry consultant Bentek Energy forecast a build of 47 Bcf utilizing its flow model and said "There are risks to some regional forecasts this week as fundamental supply and demand models in the East and Midwest regions provided contradictory views on injections compared to the previous week's EIA announced values.
"East region supply and demand implied injections suggest a larger week-over-week build of approximately 2.9 Bcf with lower demand driving the larger injection week-over-week as temperatures averaged 4 degrees Fahrenheit higher than the previous week's average at 56.4 degrees F. However, sample injection activity in the region was down, though only slightly, compared to the previous week's total."
In overnight Globex trading December crude oil fell 43 cents to $44.84/bbl and December RBOB gasoline rose fractionally to $1.3528/gal.