With traders and analysts continuing to mull the balance implications of a reported storage injection that came in lighter than consensus predictions, natural gas futures were trading close to even early Friday. The June Nymex contract was off 0.3 cents to $1.707/MMBtu at around 8:30 a.m. ET.

The U.S. Energy Information Administration (EIA) reported a smaller-than-expected 81 Bcf injection into natural gas storage inventories for the week ending May 15. Total working gas in storage as of May 15 stood at 2,503 Bcf, 779 Bcf higher than year-ago levels and 407 Bcf above the five-year average, according to EIA.

According to analysts at Raymond James & Associates, this week’s reported build implies the market was 0.86 Bcf/d tighter versus the same week last year after excluding weather-related demand. The market has averaged 2.5 Bcf/d looser over the last four weeks, the analysts said.

The reported 81 Bcf build is “constructive” compared to the 91 Bcf injection analysts at Tudor, Pickering, Holt & Co. (TPH) had projected, “but this was offset by global gas prices hitting record lows and the knock-on impact” for U.S. liquefied natural gas (LNG) feed gas demand.

“Feed gas continues to head lower, dipping to 5.8 Bcf/d yesterday, and with expectations for around 30 cargoes canceled in June and speculation of 35-45 canceled cargoes for July things are likely to get worse,” the TPH analysts said. “We’re modeling 5.5 Bcf/d of feed gas demand in June, falling to 4.5 Bcf/d in July.

“...Thankfully the supply side has come off meaningfully as well, preventing what could have been a very ugly storage print. EQT’s removal of 1.4 Bcf/d of supply from the market was a key piece, with Texas volumes also down about 1 Bcf/d week/week, contributing to an aggregate drop of around 2.6 Bcf/d.”

Analysts at EBW Analytics Group also pointed to collapsing European gas prices as a key driver behind the recent selling in the June contract given the prospect of more U.S. LNG export curtailments this summer. The market also faces the possibility that the next three reported storage injections will total 350 Bcf or more, the analysts said.

“With prices at Henry Hub still in the mid-$1.70s” and cooling degree days increasing, “the near-month contracts are likely to trade in a narrow range today,” the EBW analysts said. If Dutch Title Transfer Facility (aka TTF) pricing “continues to trade near or below yesterday’s $1.17/MMBtu level, though, the U.S. natural gas market may be in for a long bleak summer in which massive LNG curtailments drown the market with gas.”

July crude oil futures were down $1.23 to $32.69/bbl at around 8:45 a.m. ET, while June RBOB gasoline was off about 2.2 cents to $1.0235/gal.