With another smaller-than-average weekly injection potentially on tap from the latest government storage data, natural gas futures rose slightly in early trading Thursday. The August Nymex contract was up 1.3 cents to $1.694/MMBtu at around 8:40 a.m. ET.
When it releases updated inventory data at 10:30 a.m. ET, the U.S. Energy Information Administration (EIA) is expected to report an injection in the mid-30s Bcf for the week ending July 17.
A Bloomberg survey found injection estimates ranging from 28 Bcf to 46 Bcf, with a median of 36 Bcf. The average of a Wall Street Journal poll was 35 Bcf, with a low estimate of 28 Bcf and a high of 41 Bcf. A Reuters poll found estimates ranging from 28 Bcf to 46 Bcf and an average of 36 Bcf. NGI estimated a build of 35 Bcf.
EIA recorded a 44 Bcf build in the same week last year, and the five-year average is an injection of 37 Bcf.
“It was hotter than normal over much of the country besides the Northern Rockies and portions of the Plains/Midwest” during this week’s EIA report period, forecaster NatGasWeather said. “Our algorithm expects a 38 Bcf injection.”
As for the latest forecasts, NatGasWeather viewed the overnight trends as mixed, with the Global Forecast System dropping cooling degree days (CDD) from its outlook. However, the European model showed “slight hotter trends” to add to expected cooling demand.
“While the weather data has lost more than 10 CDD since the start of the week, the coming pattern is still hotter than normal across much of the U.S. through the first week of August,” NatGasWeather said. “As such, it’s up to natural gas markets to decide if the pattern is hot enough to warrant higher prices.
“…To our view, the fact that prices rallied yesterday after the weather data shed numerous CDD suggests the pattern is still likely considered hot enough to satisfy even though not as hot as once advertised.”
Meanwhile, the National Hurricane Center (NHC) was monitoring two storms in the Atlantic early Thursday, including a tropical depression, dubbed Tropical Depression 8, in the Gulf of Mexico. The depression, carrying maximum sustained winds of 30 mph, was moving west-northwest and was expected to continue in this general motion over the next few days.
“On the forecast track, the center of the depression is expected to move across the northwestern Gulf of Mexico today and Friday and make landfall along the Texas coast on Saturday,” the NHC.
Genscape Inc. estimates early Thursday pointed to no significant offshore production impacts from Tropical Depression 8.
Further out in the Atlantic, Tropical Storm Gonzalo was moving in a westward direction, expected to approach the Windward Islands by this weekend, according to the NHC. Gonzalo was carrying maximum sustained winds of 65 mph “with higher gusts. Strengthening is forecast during the next couple of days, and Gonzalo could become a hurricane later today.”
September crude oil futures were off 17 cents to $41.73/bbl at around 8:40 a.m. ET, while August RBOB gasoline was down fractionally to $1.2796/gal.
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