With what is expected to be a bearish EIA natural gas storage on Thursday, August natural gas futures may have stole a few cents on Wednesday to close at $5.931, up 9.4 cents on the day. Trading on the day was marked with a number of rises and falls, notching a low of $5.86 and a high of $5.95.

“We are staying in that same trading band with $5.75 on the low side and $6.03 on the topside,” said George Leide of Rafferty Technical Research in New York. “We haven’t taken out that band and I am still looking for lower prices as long as we don’t get above $6.03.”

Commenting on the Energy Information Administration’s (EIA) natural gas storage report, Leide said, “We have an average estimate of 85 Bcf, with a range of 70-97 Bcf.” The report will be released at the normal time on Thursday at 10:30 a.m. (ET).

A Washington, DC-based broker said the prompt month’s performance in Access trading Wednesday morning was puzzling. “What had me confused was the strength we had in the Access session in the morning before the crude reports all came out,” he said. “We had that strength despite any up-to-date influence from crude.”

The crude numbers were “generally bullish,” he said, adding that “it was a draw according to the DOE, which wasn’t really expected.”

Questioning why natural gas was up Wednesday without a catalyst, the broker noted that “there’s absolutely no weather out there and there is obviously plenty of gas around and in storage.” He added that another big natural gas storage number was expected this week as well as next week.

“In general, I am not too excited by this market as long as we are chopping in this range between $5.77 and $6.02,” the broker said. “I think we are just cycling back and forth here and haven’t really clarified whether we are going to try to work out a little bit of a bottom or whether we are biding our time until another lurch down if we get a break in crude. The market is sort of indecisive until we get past either of those points.”

On the storage front, Thursday’s number for the week ended July 16 will have to contend with last year’s 77 Bcf build as well as the 69 Bcf five-year average injection figure.

Kyle Cooper of Citigroup is calling for a storage build of between 78 and 88 Bcf. “We still consider it very likely that the current storage surpluses are expanded this week,” he said. “Our biggest concern for inaccuracy this week is associated with the build in the West. Temperature and pipeline data are indicating significantly different storage changes.”

However, Cooper said inventories remain on course to “easily” reach 3,100 Bcf by the end of the refill season, with higher inventories quite likely. “From a comparison standpoint, the largest build recorded in this week [historically] was a build of 101 Bcf, while the smallest was just 52,” he said.

According to Cooper, for inventories to eliminate the 251 Bcf surplus to last year, injections must fall 16 Bcf below last year’s number for each week. This pace would place inventories on course to reach the same 3,187 Bcf in early November that was reached last year. For this week’s report, Cooper said the injection would need to be just 61 Bcf. “We obviously believe the injection will be much larger than that.”

Following ICAP’s EIA derivatives auction from 3-4 p.m. (ET) on Wednesday, the indicative price moved from the pre-auction level of 84.9940 Bcf to 80.2172 Bcf. The electronic options auction looks to help market participants “manage exposure” to the impact of reported natural gas storage inventories released by the EIA each week. First launched in June (see Daily GPI, April 29; July 21), the over-the-counter options are offered through an auction process and are cleared by Nymex.

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