The U.S. Energy Information Administration (EIA) reported a 38 Bcf injection into natural gas storage inventories for the week ending April 3, coming in well above most estimates but besting NGI’s model by only 1 Bcf.
The larger-than-expected build sent Nymex gas futures, already a couple of cents lower early Thursday, tumbling even further once traders digested the EIA figure. In the minutes leading up to the report, the May Nymex gas futures contract was trading at $1.757, but as the storage print crossed trading desks, the prompt month made an initial bump up to $1.764. By 11 a.m. ET, however, May was down to $1.777, off 7.5 cents from Wednesday’s close.
“Demand is getting killed,” said Genscape Inc. senior natural gas analyst Eric Fell, who had called for a 36 Bcf build.
Participating in The Desk’s online energy platform Enelyst.com, Fell said not all of the demand loss resulting from Covid-19 shutdown measures were being captured by flow data. “You’ve got to look past pipeline nominations, although it helps to have infrared monitors on refineries, ethylene crackers, etc.”
Bespoke Weather Services, which had estimated an 18 Bcf injection, said the actual figure provides “a clearer sign that the data we have is not indicating the proper amount of demand destruction that is ongoing with the shutdowns.
“This makes for two very bearish numbers in a row in terms of balances. Using the two-week average balance versus the five-year average shows end-of-season storage at an impossible 4.9 Tcf.”
Ahead of the EIA report, analysts had been predicting an injection between 9 Bcf and 35 Bcf. A Wall Street Journal poll of 12 analysts showed estimates averaging at a 21 Bcf build. A Bloomberg survey arrived at a median build of 24 Bcf, as did a Reuters survey. NGI’s model estimated the injection at 37 Bcf.
The EIA’s 38 Bcf injection compares with last year’s 25 Bcf increase in storage and the five-year average injection of 6 Bcf.
Broken down by region, the South Central region posted a 32 Bcf build, including a 22 Bcf injection into nonsalt facilities and a 9 Bcf build in salts, EIA said. The Pacific region added 6 Bcf, while East facilities held steady with 382 Bcf in inventory. The Midwest withdrew 1 Bcf.
Total working gas in storage as of April 3 stood at 2,024 Bcf, 876 above year-ago levels and 324 Bcf above the five-year average, according to EIA.