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EIA Storage Data Confirms Consensus, Barely Nudges Natural Gas Futures

The Energy Information Administration (EIA) on Thursday reported a triple-digit weekly natural gas storage injection that fell right in line with expectations, leaving the bears and bulls to continue tussling over a range-bound market.

EIA reported a 106 Bcf injection into Lower 48 gas stocks for the week ending May 11, close to consensus estimates and larger than both last year’s 64 Bcf build and the five-year average 87 Bcf injection.

As the data rolled out at 10:30 a.m. ET, the June futures contract briefly traded as high as $2.811 and as low as $2.782 before returning to roughly the same $2.790-2.800 area it had traded in prior to the report. By 11 a.m. ET, June had climbed to around $2.820, up about a penny from Wednesday’s settle.

Prior to the report, surveys showed the market looking for a build close to the actual number. A Reuters survey had produced an average 105 Bcf build, with responses ranging from 99 Bcf to 118 Bcf. A Bloomberg survey had produced a median build of 107 Bcf, with responses ranging from 87 Bcf to 110 Bcf. ION Energy had called for a 103 Bcf build, while Price Futures Group had estimated an injection of 105 Bcf. Intercontinental Exchange EIA storage futures settled Wednesday at an injection of 105 Bcf.

The 106 Bcf build “does represent slight tightening from last week and is not as large as it could have been given how bearish weather was across much of the country,” Bespoke Weather Services said in a note following the report. “However, it similarly does not provide much fodder for bulls, confirming that last week’s bullish surprise may have been more of a one-off and current readings of market balance are accurate.

“Prices are reacting in their expected muted fashion; burns are looser today but have tightened over the past week, and production dips are keeping later contracts firm,” Bespoke said. “Prices may wander toward $2.75, but this print confirms range-bound trading for now.”

Total working gas in underground storage as of May 11 stood 1,538 Bcf, versus 2,359 Bcf a year ago and five-year average inventories of 2,039 Bcf. The year-on-year storage deficit shrank week/week from minus 863 Bcf to minus 821 Bcf, while the year-on-five-year deficit narrowed from minus 520 Bcf to minus 501 Bcf, EIA data show.

By region, the South Central region recorded a 32 Bcf build for the week, including 12 Bcf into salt and 19 Bcf into nonsalt, according to EIA. The East region also injected 32 Bcf, while the Midwest saw a 27 Bcf build. In the Mountain region 6 Bcf was injected, while 9 Bcf was refilled in the Pacific.

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