Natural gas futures were for the most part unfazed Thursday despite news that the Energy Information Administration (EIA) revealed a bearish 68 Bcf storage build for the week ended Oct. 19, which puts this year’s inventory back on track to reach record levels. After working lower prior to the 10:30 a.m. EDT report to record a $6.900 low, November natural gas futures reversed course, registering a high of $7.200 before settling the day at $7.188, up 21.6 cents from Wednesday.

The big story of the day was that crude futures continue to skyrocket, which natural gas traders were hard pressed to ignore. In fact, some said the $3.36/bbl hike to a new record settle of $90.46/bbl on Thursday alone was enough to pull gas futures higher, despite the lack of a firm relationship between the markets.

“Of course today’s EIA storage figures eclipsed even the most bearish of forecasts but since that doesn’t always matter — not if you take psychological and technical reasoning into consideration, and then there’s that two-day $5 gain in crude amongst other things — and since these markets are often counterintuitive, it became apparent (after a knee-jerk reaction downward and anemic lows made at $6.882) early on that a 68 Bcf injection while higher than the highest expectations wasn’t going to cut it and there was no place to go but up,” said Jay Levine, a broker with enerjay LLC.

Most industry expectations were looking for an injection in the 50-65 Bcf range. A Reuters survey of 20 industry players produced a range of injection expectations from 35 to 65 Bcf. The average expectation of the survey was for a 54 Bcf build. Golden, CO-based Bentek Energy’s flow model indicated an injection of 63 Bcf. The actual injection was extremely bearish when compared to last year’s 24 Bcf injection and the five-year average injection of 49 Bcf.

Following the significant injection, market experts were pondering the coincidence of having last week’s build report for the week ended Oct. 12 being smaller than almost all estimates while this week’s report revealed an injection that was larger than almost all predictions.

“At first glance, it looks like there is more of a timing issue here than anything else,” said Tim Evans, an analyst with Citigroup in New York. “The prior 39 Bcf net injection was less than expected and now this report is high by a similar amount. The big 68 Bcf build does put the market squarely back on track for a new record this season, perhaps somewhat north of 3,500 Bcf now based on this surprise.”

Levine echoed the sentiment. “Last week’s EIA storage number was lower than the lowest Reuters estimate (there might have been one down that low) and this week’s EIA storage number was higher than the highest estimate as EIA reports a 68 Bcf injection,” he said. “Couple that with yesterday’s API/DOE stats — blowing away any and all estimates — and it goes to show that no one knows what the heck is going on (at least when it comes to these reports).”

As of Oct. 19, working gas in storage stands at 3,443 Bcf, which is only 18 Bcf below last year’s 3,461 Bcf record set in the storage report for the week ended Oct. 20, 2006. On a date-adjusted basis, stocks are currently 15 Bcf less than last year at this time and 232 Bcf above the five-year average of 3,211 Bcf.

The East region injected 38 Bcf and the Producing region injected 23 Bcf, while the West region chipped in 7 Bcf.

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