The U.S. Energy Information Administration (EIA) reported a 45 Bcf injection into natural gas storage inventories for the week ending Aug. 21, a figure that was right in line with consensus but below the year-ago and five-year average builds.
September Nymex gas futures, trading more than 12 cents higher ahead of expiration later Thursday at $2.584/MMBtu, slipped a couple of cents to $2.559 after the print crossed trading desks. By 11 a.m. ET, however, the prompt month was back at $2.58, up 11.9 cents from Wednesday’s close.
“I don’t think price knows what direction to go. There’s too much uncertainty,” said managing director Het Shah of The Desk’s online platform Enelyst.
With Hurricane Laura taking a direct hit at the Cameron liquefied natural gas (LNG) terminal in Louisiana, and the nearby Sabine Pass LNG facility barely one mile outside of the Category 4 storm’s eye, Shah expects the event to be a demand killer, “especially if the export terminals got damaged.”
However, with reports of additional production declines in the Haynesville Shale, South Louisiana and South Texas, as well as the potential for “gathering lines getting smacked, it’s a real concern,” Shah said.
Analysts noted that Cameron and Sabine Pass could potentially take out salt storage in order to manage their respective shutdowns, “if there is any left.”
The EIA reported no net change week/week for South Central inventories after salt facilities withdrew 1 Bcf and nonsalts added 1 Bcf. Salt stocks are now at 334 Bcf, and maximum capacity is in the range of 400 Bcf.
Elsewhere, the East led with a 25 Bcf injection, while the Midwest added 24 Bcf, according to EIA. Mountain region stocks rose by 3 Bcf, and the Pacific withdrew 7 Bcf.
Total working gas in storage was 3,420 Bcf, 580 Bcf above year-ago levels and 438 Bcf above the five-year average, according to EIA.
Ahead of the report, a Bloomberg survey showed injection estimates ranging from 39 Bcf to 58 Bcf, with a median of 44 Bcf. A Wall Street Journal poll had the same range and arrived at an average 46 Bcf injection, while the median of a Reuters poll with the same range produced a 47 Bcf build. NGI projected a 43 Bcf injection.
With the September contract set to expire at the end of Thursday’s session, Huntsville Utilities natural gas scheduler Donnie Sharp said the rollover and winter anxiety were leading the surge along the Nymex curve. “October is already up in the bands, so it could go a little more into Friday when it becomes prompt, and then the market will reevaluate Monday.”
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