With no major changes to the weather outlook overnight, and with the market continuing to mull the latest government storage data, natural gas futures were trading slightly lower early Friday. The June Nymex futures contract was down 1.0 cent to $2.568/MMBtu shortly after 8:30 a.m. ET.
The latest forecast from Radiant Solutions Friday showed only minor differences compared to the previous outlook. In the six- to 10-day period, the forecaster noted a “small cool change” for parts of the West but “little change” elsewhere.
“Strong ridging will continue a record-breaking heat wave in the Southeast in this period, with temperatures peaking early before increased humidity levels tame anomalies during the second half,” Radiant said. “Along the periphery of the ridge will be an active storm track through the Midwest and East. Temperatures peak in the early half along the East Coast, including a max forecast of 95 degrees in Washington, DC, on Day 6.”
In the 11-15 day outlook, Radiant highlighted a small cooler trend in the Pacific Northwest. Otherwise the forecaster continued to call for warmer than normal temperatures across most of the Lower 48, with near-normal conditions in the Northeast.
Meanwhile, the Energy Information Administration (EIA) on Thursday reported a 100 Bcf injection into U.S. natural gas stocks for the week ended May 17, versus a 93 Bcf injection in the year-ago period and a five-year average 88 Bcf build. Total Lower 48 working gas in underground storage stood at 1,753 Bcf as of May 17, 137 Bcf (8.5%) above last year’s stocks but 274 Bcf (minus 13.5%) lower than the five-year average, according to EIA.
Analysts with Raymond James & Associates said the 100 Bcf build implies the market was 1.7 Bcf/d looser versus the same week last year, excluding weather-related demand. Over the past four weeks, the market has averaged 2.4 Bcf/d looser year/year, according to the firm.
Genscape Inc. analysts viewed the 100 Bcf injection as about 3.7 Bcf/d looser versus the five-year average when compared to degree days and normal seasonality.
Tudor, Pickering, Holt & Co. (TPH) analysts observed that inventories have sat at a 9% surplus to year-ago levels throughout the month of May, with builds continuing to track above the five-year average.
“Total degree days came in 8% above the five-year average, and the weather-adjusted oversupply is sitting at 3 Bcf/d (up from 2 Bcf/d last week),” the TPH team said. Liquefied natural gas (LNG) “export volumes continue to ramp, reaching an all-time high of 5.98 Bcf/d late last week...we see strong LNG exports as key to temporarily balancing the market in 3Q2019. A preliminary look at next week has inventories building by 103 Bcf, compared to a five-year average 95 Bcf build.”
July crude oil futures were up 69 cents to $58.60/bbl shortly after 8:30 a.m. ET, while June RBOB gasoline was up fractionally to $1.9198/gal.