Natural gas futures traders essentially brushed off the bearish news Thursday morning from the Energy Information Administration (EIA) that 78 Bcf was injected into underground stores for the week ending Oct. 28. The injection was at the very top of industry estimates going into the report. December natural gas futures ended up adding 2.9 cents over Wednesday’s finish to close at $3.778.

“While a 3-cent gain is nothing to write home about, the fact that it occurred on a day the market received such a bearish storage report counts for something,” said a New York trader. “I’m not ready to say that this is the start of an up-leg, but we were pretty surprised at the contract’s firmness following a larger-than-expected 78 Bcf injection.”

Just prior to the 10:30 a.m. EDT report, the December contract was trading at $3.797. However, in the few minutes that followed, the prompt-month contract put in a $3.741 low before immediately rebounding to $3.833.

The day’s 2.9-cent climb Thursday also put an end to recent declines, which sliced 18.5 cents off of the prompt-contract over the two previous regular trading sessions.

Citi Futures Perspective analyst Tim Evans, who had been expecting a 59 Bcf build, deemed the storage report “bearish” and said the market is currently at a pivotal point. “The 78 Bcf in net injections was in the upper end of the range of expectations, a bearish surprise that will provide a test of market sentiment,” he said. “If the market can turn higher despite this news, it will have a positive impact on market sentiment and could reinforce the idea that prices are poised for a seasonal rally.”

Heading into the report, a Reuters survey of 25 market players produced injection estimates spanning from 47 Bcf to 80 Bcf with an average expectation of a 69 Bcf addition.

The actual 78 Bcf injection was much larger than last year’s date-adjusted 68 Bcf build for the week and the five-year average build of 35 Bcf.

As of Oct. 28, working gas in storage stood at 3,794 Bcf, according to EIA estimates. Stocks are now only 17 Bcf less than last year at this time and 201 Bcf above the five-year average of 3,593 Bcf. For the week the Producing and East regions kicked in 39 Bcf and 32 Bcf, respectively, while the West Region chipped in 7 Bcf.

The 78 Bcf addition should give traders a more complete idea of how much gas they have to work with for the winter heating season. The deficit relative to last year narrowed a bit with the report, but whether this year’s inventories will be able to reach last year’s record 3.84 Tcf is still up for debate.

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