The Energy Information Administration (EIA) reported an 89 Bcf injection into natural gas storage inventories for the week ending Oct. 25, coming in on the high side of estimates and adding even more cushion to historical stock levels.
Natural gas futures prices, which had climbed as high as $2.738 early Thursday, gave back those gains and then some after the EIA’s 10:30 a.m. ET report, with the November Nymex contract trading at $2.673, down 1.8 cents day/day, just after the print hit the screen. By 11 a.m., the prompt month was at $2.655, down 3.6 cents on the day.
Bespoke Weather Services, which had called for a 91 Bcf injection, said the print is still reflective of balances that were loose last week. “The market had sold off ahead of the number due to some weakness in physical markets, and this week’s in-week balances do look improved, but from here, the trade still will remain mostly tied into which direction the weather forecasts trend as we head into this weekend.”
Indeed, weather models continue to advertise frigid conditions for the next couple of weeks, although there remains much uncertainty about whether temperatures begin to moderate after mid-November or remain on the chilly side.
“Once again, both models tease a possible change in pattern at the very end, but until it progresses forward in the forecast, it is not going to be trusted,” Bespoke chief meteorologist Brian Lovern said.
The EIA’s reported 89 Bcf injection compares to last year’s 49 Bcf build and the 65 Bcf five-year average, according to EIA.
Ahead of the report, estimates ranged widely from a 66 Bcf injection to a 94 Bcf injection, although most projections clustered around a mid-80 Bcf build.
“Things are starting to get interesting now that winter is here,” said Het Shah, managing director of industry chat platform Enelyst.com.
Shah pointed to pipeline freeze-offs that are already occurring as much of the central United States is blanketed by Arctic air. That is “even more important now that we have a ton of wet gas.”
Residential/commercial demand is also soaring, and liquefied natural gas feed gas deliveries also have continued to come in near record highs, he said.
Broken down by region, the South Central added 44 Bcf into storage stocks, including a 25 Bcf build into salt facilities and a 19 Bcf injection into nonsalts, the EIA said. Midwest inventories grew by 26 Bcf, while East stocks rose by 15 Bcf.
Total working gas in storage as of Oct. 25 was 3,695 Bcf, 559 Bcf above last year and 52 Bcf above the five-year average, according to EIA.