Stemming the freefall of the last two days, the expiring July natural gas futures contract — with some help from significant strength in crude futures — rallied Thursday morning as the Energy Information Administration (EIA) reported a 90 Bcf injection to storage for the week ended June 20. The contract recorded a high of $13.222 late in the regular session before going off of the board at $13.105, up 35.2 cents from Wednesday’s close. August futures, which now take over front-month contract classification, finished Thursday at $13.248, up 38.2 cents from Wednesday.

While some market watchers had expected exactly 90 Bcf to be added to storage, others had been looking for a number closer to 100 Bcf. The 90 Bcf injection dwarfed the previous week’s 57 Bcf build, but the expectations for this report were higher. Just prior to the 10:35 a.m. EDT report, the prompt-month contract was trading at $12.567. Immediately following the report, July futures rebounded up to $12.855.

Thursday’s strength put a damper on a lot of the recent bearish talk, which had gained steam during a nearly half-dollar decline earlier in the week. A number of industry traders and analysts had classified the recent market situation as a tug of war between support in the $12.60s and resistance up at the $13.350 high, with most expecting the lower end of the range to see the most action.

“I think a number of things came together on Thursday to gain back a majority of the 45-cent decline from Tuesday and Wednesday,” said a New York trader. “First, some in the industry were expecting an even larger build in underground storage. Second, there was well defined support down in the $12.60s, so once we breached that I think some buying was triggered. Lastly, crude had a gigantic record-setting up-day, which [July] natural gas couldn’t ignore. From here, August natural gas could make a run at the highs.”

Sparked by comments from OPEC’s president that crude prices could reach $150 to $170/bbl during this summer, August crude broke the $140/bbl mark, setting a new all-time record high. The contract Thursday traded as high as $140.05/bbl before closing at $139.64/bbl, up a whopping $5.09 over Wednesday’s regular session close. The day’s action topped the previous front-month trading high of $139.89/bbl, which was recorded on June 16.

Breaking down the natural gas storage report, Citi Futures Perspective analyst Tim Evans hit the nail on the head with a 90 Bcf expectation. “The 90 Bcf net injection was spot on the expectations and also relatively neutral compared with the five-year average of 94 Bcf.” Last year’s injection for the week was 96 Bcf.

A Reuters survey of 22 industry players produced a range of build expectations from 65 Bcf to 99 Bcf with an average injection estimate of 90 Bcf being right on the money. However, Golden, CO-based Bentek Energy said its flow model indicated an injection of 98 Bcf.

As of June 20, working gas in storage stood at 2,033 Bcf, according to EIA estimates. Stocks are 382 Bcf less than last year at this time and 56 Bcf below the five-year average of 2,089 Bcf. The East region injected 62 Bcf and the Producing and West regions chipped in 18 Bcf and 10 Bcf, respectively.

Weather bulls, take heart. The National Weather Service (NWS) predicts above-normal accumulations of cooling degree days (CDD) for major energy markets, which should be reflected in next week’s inventory report. For the week ended June 28 the NWS forecasts that New England will see 52 CDD, or 29 more than normal, and New York, New Jersey and Pennsylvania will have 55 CDD, or 17 more than normal.

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