The U.S. Energy Information Administration (EIA) reported an injection of 71 Bcf natural gas into storage for the week ended May 7. The print came in near expectations and failed to boost Nymex natural gas futures.
While it was warmer than normal over much of the United States during the covered week, cooler temperatures across the Upper Midwest and parts of the Northeast fueled late-season heating demand and curbed injections modestly, NatGasWeather said.
EIA announced an implied flow of 75 Bcf. However, EIA reclassified the amount of working gas in storage previously by 4 Bcf, resulting in the net 71 Bcf print.
The result compared favorably to the five-year average build of 82 Bcf and the year earlier injection 104 Bcf. It was roughly on par with the median estimates found in polls.
Ahead of the EIA report, the June contract was down 2.3 cents to $2.946/MMBtu. The prompt month jumped 2 cents into the green when the data was released. By 11 a.m. ET, however, the June contract was trading at $2.973, up only four-tenths of a cent from the prior day’s close.
The EIA print “is still reflective of a rather tight supply/demand balance, but our thesis is that balances will loosen in the next couple of weeks,” Bespoke Weather Services said after the storage report was released. “The market may be sensing this as well, as it initially rallied a few cents, likely on the reclassification, but has given back some of the gains.”
Prior to the report, estimates submitted to Bloomberg showed a median 75 Bcf injection expected. Predictions ranged from an injection of 68 Bcf up to 92 Bcf. The results of a Reuters poll showed estimates that spanned from an injection of 68 Bcf to 82 Bcf, with a median build of 77 Bcf.
The average forecast in a Wall Street Journal survey landed at 73 Bcf. Estimates ranged from increases of 68 Bcf to 79 Bcf.
NGI’s model forecasted an 82 Bcf injection.
The latest build lifted inventories to 2,029 Bcf. That compares with the year-earlier level of 2,407 Bcf and the five-year average of 2,101 Bcf.
By region, the South Central build of 21 Bcf led all others and included a 16 Bcf injection into nonsalt facilities and a 5 Bcf build in salts. EIA’s 4 Bcf reclassification was in the South Central.
The Midwest and East regions followed with builds of 16 Bcf and 15 Bcf, respectively, according to EIA. Pacific inventories grew by 11 Bcf, while Mountain region stocks rose by 7 Bcf.
Looking ahead to next week, early injection estimates are hovering around the 70 Bcf level, though analysts expect injections to rise closer to the triple-digit level by the end of May.
Weather-driven demand is expected to fade in the second half of the month, Bespoke said.
On the bullish side, however, liquefied natural gas (LNG) volumes remain robust thanks to Asian and European needs for U.S. exports.
“LNG continues to fire on all cylinders as Europe is trying to replenish their storage inventories and Asian demand has continued to come in strong,” NGI’s Leticia Gonzales, price and markets editor, said on The Desk’s online energy platform Enelyst. “Higher carbon prices are also dragging LNG prices higher.”
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