After having pushed June natural gas futures lower Thursday morning on the expectation of a storage build report of approximately 100 Bcf, traders were forced to backpedal higher after the Energy Information Administration (EIA) reported that 95 Bcf was injected into underground inventories for the second consecutive week. Alas, when all was said and done the prompt-month contract ended up closing at $4.292, down 4.1 cents from Wednesday’s finish.

Just prior to the 10:30 a.m. EDT report covering the week ending May 8, June futures were trading at $4.125, but in the minutes that immediately followed it rebounded to trade at $4.213. After peaking at $4.349 in afternoon trade the contract inched lower to close out the regular session. While the 95 Bcf injection outclassed both last year’s 89 Bcf build and the five-year average injection of 83 Bcf, it appeared that traders had been looking for an even larger build.

The market was also abuzz Thursday following reports that the United States Natural Gas Fund was responsible for the price rebound of the last two weeks due to a sizeable open interest position (see related story).

The 95 Bcf was almost spot on with his estimate of a 94 Bcf build, but Citi Futures Perspective analyst Tim Evans labeled the injection “supportive relative to expectations,” but just by a little.

“The 95 Bcf in net injections to U.S. natural gas storage for last week was inline with our own assessment, and we’d say this keeps the market on track for gradually declining production over the intermediate term,” he said. “The data was supportive relative to consensus expectations and could encourage prices to bounce. However, we’d expect a bounce to be limited because the comparison with an 83 Bcf five-year average build was still bearish, with the year-on-five-year average surplus growing to 374 Bcf, the highest since August 2007.”

Hencorp Becstone Futures LC broker Tom Saal said he saw the 95 Bcf injection as being pretty much inline with expectations, so Thursday’s strength was a little surprising. “Now we are not exploding higher, but we are inching up to where we were earlier in the week,” Saal said. “If we had gotten a 100 Bcf build, I think this thing would be read completely different. The psychological impact alone of a triple-digit injection this early in the refill season would have been impressive.

“We are kind of trading where we have been over the last few days. I think weather could call our next move,” he added. “Macro stimulus from other commodities or the U.S. dollar could also shape whether we bump higher or fall off a bit.”

A Washington, DC-based broker saw Thursday’s storage report as somewhat bullish. “The chatter ahead of the report was for a triple-digit build, so the actual injection likely helped the bulls a bit. However, our very critical key $4.420 number continues to act as resistance. We’ve gotten above it a few times over the last few sessions, but we’ve failed to hold it.”

The broker said all of the “bad bearish” news is already known and has been priced in. “People keep talking about all of the negative news, but everyone already knows these things,” he said. “The onus is on the bulls to provide a bullish case. Until we get above that $4.420, we are still stuck on our charts between that number and $3.950 as a range.”

As of May 8, working gas in storage had broken above the 2 Tcf level to stand at 2,013 Bcf, according to EIA estimates. Stocks are 497 Bcf higher than last year at this time and 374 Bcf above the five-year average of 1,639 Bcf. For the week, the East region injected 59 Bcf and the Producing and West regions deposited 23 Bcf and 13 Bcf, respectively.

Going into the report, Bentek Energy said its flow model indicated an injection of 99 Bcf. The research and analysis firm’s East and West region estimates were spot on, but its Producing region estimate was high by 4 Bcf.

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