The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 35 Bcf into storage for the week ending August 28. The result came in roughly on par with median estimates and nudged Nymex natural gas futures higher.
The latest injection was bullish relative to a year earlier, when EIA reported a 77 Bcf injection, and the five-year average build for the week of 66 Bcf. EIA last Thursday reported a 45 Bcf injection for the week ended August 21.
Prior to the report, a Bloomberg survey found estimates ranging from 29 Bcf to 43 Bcf, with a median of 37 Bcf, while a Reuters poll spanned 25 Bcf to 43 Bcf and showed a median of 35 Bcf. NGI estimated an injection of 32 Bcf.
Analysts said the latest injection signaled that demand, boosted by late summer heat during the covered week, took a needed step toward realigning with supply after months of imbalance caused by the coronavirus pandemic.
“It was very warm to hot over most of the United States” during the reporting period, NatGasWeather said.
Ahead of the EIA report, the October contract was up 4.1 cents at $2.527/MMBtu. The prompt month ticked down to around $2.523 when the data was released. By 11 a.m. ET, however, the October contract was trading at $2.544, up 5.8 cents from the prior day’s close..
The build for the August 28 week lifted inventories to 3,455 Bcf, above the year-earlier level of 2,917 Bcf and above the five-year average of 3,048 Bcf.
By region, the Midwest led with a build of 20 Bcf and the East region reported 14 Bcf, according to EIA. Mountain region stocks were flat, while Pacific inventories declined by 2 Bcf.
The South Central build of 2 Bcf included a 6 Bcf injection into nonsalt facilities and a withdrawal of 3 Bcf from salts. EIA noted totals do not always equal the sum of components because of independent rounding.
Looking ahead to next week, participants on The Desk’s online energy platform Enelyst forecast a more robust storage injection for the week ending Friday — around 60 Bcf or higher — as fall weather moves into parts of the country, minimizing cooling demand. They also noted uncertainty around impacts of Hurricane Laura’s aftermath in Louisiana and Texas.
Bespoke Weather Services, which preliminarily models a build of 62 Bcf for the next EIA report, said anticipation of a higher figure could weigh on gas futures in coming days.“We still see balances as loose enough to be quite dicey at the front of this curve,” the firm said.
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