Natural gas futures knee-jerked higher Thursday morning temporarily after the Energy Information Administration (EIA) reported the first nontriple-digit storage build in six weeks. Thursday proved to be a streak-breaker in more than one way as the July contract ended up closing 8.3 cents higher at $3.844, halting the consecutive down-day trend at five.

While Bentek Energy nailed the 94 Bcf injection in its prediction, Citi Futures Perspective’s 103 Bcf estimate and the Reuters survey’s 99 Bcf call made the actual report somewhat bullish. July natural gas futures were steadily climbing Thursday morning in anticipation of a smaller-than-expected injection. Just prior to the 10:30 a.m. EDT report the front-month contract was trading at $3.850. In the minute that followed, futures jumped to $3.950 before running into resistance and retreating to the day’s low of $3.764. From there futures crept higher.

Following the last week of weakness and taking into account the July contract’s expiration Friday, some traders had been looking for a round of short-covering to creep in to the market late this week (see Daily GPI, June 25). Despite the uptick, other market watchers still attach the “range-bound” label to this market.

“We jumped higher on the number, but it really was only a blip on the screen as we returned almost immediately. It really seems like a nonevent at this point because it is basically a foregone conclusion that we have a lot of gas available,” said Julio Sera, a broker with Hencorp Becstone Futures LC in Miami. “This market is purely moving horizontally between $3.500 and $4.500. The only things that are going to break us out of this range to the upside are hurricanes in the Gulf, extended periods of heat, inflation or an economic recovery.”

Calling the injection bullish, Citi Futures Perspective’s Tim Evans said that while the number was larger than historical comparisons, it was smaller than expected and thus supportive of prices. “We note that the data has been oscillating from bullish to bearish on almost a weekly basis, so it’s hard to be confident of the trend, but we do expect to see declining production overall, which should lead to a supportive trend in the weeks and months ahead,” Evans said.

Going into Thursday’s natural gas storage report for the week ending June 19, market watchers were less sure than they were earlier in the week that the industry would see its sixth consecutive triple-digit build. While smaller than some expected, the 94 Bcf build still grew the surplus over last year’s storage level and the five-year average. Last year 85 Bcf was injected for the similar week and the five-year average build was 84 Bcf.

As of June 19, working gas in storage stood at 2,651 Bcf, according to EIA estimates. Stocks are now 631 Bcf higher than last year at this time and 482 Bcf above the five-year average of 2,169 Bcf. The East region injected 70 Bcf while the West and Producing regions each contributed 12 Bcf.

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