The Energy Information Administration (EIA) reported a 104 Bcf injection into natural gas storage inventories for the week ending Oct. 11, marking the third time in four weeks that stocks have risen by at least 100 Bcf.
Although the reported build easily surpassed last year’s 82 Bcf injection and the five-year average of 81 Bcf, it fell on the lower end of expectations. Traders didn’t appeared to be swayed one way or the other, with the November Nymex gas futures contract holding fairly steady in the minutes after the report.
The November contract was trading at $2.337, up 3.4 cents, in the minutes leading up to the EIA’s 10:30 a.m. ET report. The contract briefly jumped to $2.355 as the print hit the screen but had fallen back to $2.34 by around 11 a.m.
“Very muted market reaction so far,” said Huntsville Utilities’ Donnie Sharp, natural gas coordinator.
Ahead of the EIA report, a Bloomberg survey produced a median 108 Bcf estimate for this week’s report, with estimates ranging from 101 Bcf up to 117 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures settled Wednesday at 108 Bcf. NGI’s model predicted an injection of 115 Bcf.
Speaking on the industry chat platform Enelyst.com, Bespoke Weather Services chief meteorologist Brian Lovern said the 104 Bcf injection doesn’t really change the supply/demand picture in its model, even though its 105 Bcf projection was in line with the actual print. “It’s on to the midday weather models now.”
The overnight Wednesday model runs unanimously moved back in the colder direction, also showing a pattern type that would be likely to stay cold into the 16- to 20-day period. The chillier shift boosted futures prices at the start of Thursday’s session.
Broken down by region, the South Central added 39 Bcf into storage, including a 17 Bcf injection into salt facilities and 22 Bcf into nonsalts, according to the EIA. Midwest inventories rose by 35 Bcf, while the East rose by 26. Pacific stocks held steady at 296 Bcf.
Total working gas in storage as was 3,519 Bcf, 494 Bcf above year-ago levels and 14 Bcf above the five-year average.
“It looks to me like, psychologically, the market has accepted the high end-of-season number, and is cautiously stepping forward with minimum anxiety,” Sharp said. “Other than some more short-covering rallies, I think the towel is ready to get tossed. Just waiting on weather. Weather rules. The anxiety can change very quickly.”