With traders mulling somewhat warmer trends in the overnight forecasts as they awaited the latest round of Energy Information Administration (EIA) storage data, natural gas futures were trading slightly higher early Thursday. The August Nymex futures contract was up 2.5 cents to $2.329/MMBtu as of 8:30 a.m. ET.
Estimates ahead of Thursday’s EIA report, scheduled for 10:30 a.m. ET, have been pointing to a near-average injection in the 60s Bcf range. A Bloomberg survey showed a median 69 Bcf based on 13 estimates ranging from 64 Bcf to 83 Bcf. A Reuters survey called for a 65 Bcf build based on responses from 54 Bcf to 78 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Wednesday at 61 Bcf, while NGI’s model predicted a 65 Bcf injection.
Last year, EIA recorded a 46 Bcf injection for the period, which covers the week ended July 12. The five-year average is a build of 63 Bcf.
“It was hotter than normal across the southern and eastern U.S., while cool versus normal over the West and Plains,” NatGasWeather said of this week’s EIA report period. “A difficult build to predict due to early impacts from tropical system Barry, as well as closures from the Fourth of July holiday that likely carried over. Our algorithm predicts a build of 64 Bcf, near expectations.”
As for the overnight weather data, the forecaster noted cooler trends for early next week but hotter trends for July 26-30, especially in the European model.
“Overall, no major changes as a very hot pattern plays out through this weekend, highlighted by mid-90s from Chicago to New York City,” NatGasWeather said. “However, strong weather systems with cooling remain on track to sweep across the central, northern, southern and eastern U.S. next week with much lighter demand.
“More impressive heat is likely to return across the southern U.S. at the end of July into the start of August and where hotter trends were observed in the overnight data, although the northern U.S. still looks a bit too comfortable.”
Meanwhile, Gulf of Mexico production is slowly recovering in the wake of former Hurricane Barry, according to the latest estimates from Genscape Inc.
“Regional producers and system operators stated earlier this week that personnel are returning to facilities but that flows could not begin until inspections were completed,” Genscape senior natural gas analyst Rick Margolin said. “Yesterday, a variety of operators posted notice that inspections are complete.
“Our estimate for today’s total Gulf region (offshore Gulf of Mexico, northern and southern Louisiana and neighboring offshore areas) production is up to 9.7 Bcf/d, about 0.8 Bcf/d higher than the hurricane-driven low of 8.9 Bcf/d on July 12. That said, Genscape’s production team estimates there is still about 1.3 Bcf/d of gas shut in.”
At around 8:30 a.m. ET, August crude oil futures were trading 32 cents higher at $57.10/bbl, while August RBOB gasoline was up fractionally to $1.8873/gal.