Natural gas futures were trading a few pennies higher early Friday as analysts continued to mull the latest government storage data, which hints at sizable production declines over the past month. The June Nymex contract was up 3.4 cents to $1.715/MMBtu at around 8:40 a.m. ET.

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The Energy Information Administration (EIA) on Thursday reported 103 Bcf injection into storage inventories for the week ending May 8 that came in slightly below consensus. The 103 Bcf build compares with last year’s 100 Bcf build and the five-year average build of 85 Bcf, according to EIA.

Total working gas in storage as of May 8 was 2,422 Bcf, 799 Bcf above year-ago levels and 413 Bcf above the five-year average, EIA said.

“Compared to degree days and normal seasonality, this week’s injection appears loose by approximately 3.8 Bcf/d versus the prior five-year average,” Genscape Inc. analyst Eric Fell said in a note to clients early Friday. “While 3.8 Bcf/d is still very loose versus normal, it was once again tighter than the previous week and about 5 Bcf/d tighter than the all-time record loose injection from four weeks ago,” when the reported injection for the week ending April 16 came in 8.8 Bcf/d loose versus normal.

Production declines have helped to tighten balances, according to Fell, with Genscape’s daily pipeline flow modeling showing output down about 4 Bcf/d for the most recent week compared to the week ending April 16.

“Production declines are being driven by both structural factors (steep declines in rig counts and well completions) as well as crude production shut-ins,” Fell said. “Our production team estimates approximately 2 Bcf/d of associated gas for every million bbl/d of oil, while EIA estimates are showing U.S. crude production down approximately 1.5 million b/d versus the peak in mid-March.

“…Underlying demand also appears to have bottomed and is beginning to rebound from Covid-related demand destruction, as some areas have begun to emerge from lockdown mode.”

Natural gas prices could be in for range-bound trading over the next few sessions, with the June contract appearing to find “solid support” around $1.595, according to analysts at EBW Analytics Group.

“Natural gas tried to rally yesterday” following EIA’s report, but after going as high as $1.715 “the June contract gave back more than one third of its gain,” the EBW analysts said. “Just as significantly, the July and August contracts, which had tried to follow June higher, ended with gains of just 2.8 cents.

“This weakness is telling. WIth power sector natural gas demand declining sharply from recent highs and Sabine Pass operating at less than half of capacity, the upside potential for the near-month contracts appears to be limited.”

June crude oil futures were up $1.02 to $28.58/bbl at around 8:40 a.m. ET, while June RBOB gasoline was up about 3.5 cents to around 95.0 cents/gal.