Markets | Natural Gas Prices | NGI All News Access
Despite Solid Storage Injection, Natural Gas Futures Find Footing as Supply Adequacy Remains in Question
U.S. utilities injected 89 Bcf of natural gas into storage for the week ended May 13, the U.S. Energy Information Administration (EIA) reported Thursday. The result was on par with expectations but left inventories relatively lean for this time of year. Nymex natural gas futures crept back from early trading lows in response.
Temperatures during the report week were “much hotter than normal” for most of the country, NatGasWeather said, galvanizing robust cooling demand. However, wind generation was also strong, helping to meet demand in Texas and other markets.
Prior to the report, the June futures contract traded down 13.8 cents at $8.230/MMBtu. The prompt month climbed back to $8.265 when the EIA data was released at 10:30 a.m. ET.
[Shale Daily: Including impactful news and transparent pricing for shale and unconventional plays across the U.S. and Canada, Shale Daily offers a clear snapshot of natural gas supplies for analysts, investors and global LNG buyers. Learn more.]
Within 30 minutes, June futures were back in the green and up 6.0 cents from the prior day to $8.428.
Ahead of the print, analysts had expected an injection in the high 80s Bcf. Estimates submitted to Bloomberg ranged from 83 Bcf to 93 Bcf, with a median build of 89 Bcf. Results of Reuters’ poll spanned estimated increases of 80 Bcf to 98 Bcf, with a median of 88 Bcf.
The five-year average injection for the period was 87 Bcf. EIA posted a 71 Bcf increase for the year-earlier period.
The latest increase lifted inventories to 1,732 Bcf. At that level, stocks were well below the year-earlier total of 2,090 Bcf and the five-year average of 2,042 Bcf.
With forecasters expecting a hot summer, markets have rallied this spring on worries that demand may outstrip supply and leave storage levels for next winter precariously light.
“After a late start, injections have been good thus far, but given where we ended winter, injections must be great” to meet demand this summer, said one analyst on The Desk’s online energy platform Enelyst.
By region, the South Central increase of 32 Bcf led all others and included a 24 Bcf injection into nonsalt facilities and a 10 Bcf increase in salts. EIA noted totals do not always equal the sum of components because of independent rounding.
The East and Midwest regions followed, with each posting injections of 22 Bcf, according to EIA. Mountain region stocks increased by 7 Bcf, while Pacific inventories rose by 4 Bcf.
Enelyst’s early polling showed expectations for next week’s EIA report ranging from injections of 85 Bcf to 109 Bcf.
However, because of continued strong cooling demand in the current week, the next EIA print may easily come in smaller than expectations, Bespoke Weather Services said.
“As a result, we have lowered our estimate for next week’s number to 80 Bcf, versus the consensus we are hearing in the low 90s,” Bespoke said.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |