Natural gas futures were trading slightly lower early Friday as analysts continued to mull the implications of the latest government storage data and what it suggests about the impacts of the Covid-19 pandemic. The May Nymex contract was off 2.2 cents to $1.793/MMBtu at around 8:30 a.m. ET.

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The Energy Information Administration (EIA) on Thursday reported a 43 Bcf injection for the week ending April 17, a figure that compares with last year’s 92 Bcf injection and the five-year average 49 Bcf build. Total working gas in storage as of April 17 was 2,140 Bcf, 827 Bcf higher than last year and 364 Bcf above the five-year average, according to EIA.

“All eyes in the gas market are on supply as shut-ins have the ability to trump any headwinds from Covid-19” or shut-ins of U.S. liquefied natural gas (LNG) exports, analysts at Tudor, Pickering, Holt & Co. (TPH) said in a note to clients early Friday. “Things are certainly trending in the right direction as yesterday’s pipe scrapes show supply dipping to around 92.5 Bcf/d, the lowest point (excluding freeze-offs) since last September.

“From peak levels, U.S. dry gas supply is now off about 3.7 Bcf/d, led by Texas, which is down 1.4 Bcf/d from the September high of 23.5 Bcf/d, and the Northeast, down 1.4 Bcf/d from a peak of 33.8 Bcf/d in November.”

Genscape Inc. pegged the 43 Bcf injection at around 8.9 Bcf/d looser than the prior five-year average when compared to degree days and normal seasonality. That places it as the loosest weather-adjusted storage report in the firm’s data going back to 2005.

“This week’s injection is an interesting comparison versus the week ending March 12 (five weeks ago), which was just before the impacts of Covid began to impact demand,” Genscape analysts Eric Fell said. “The current storage week was a bit colder than the week of March 12, yet we injected 53 Bcf more this week (43 Bcf injection versus a 9 Bcf withdrawal).”

Higher net supply driven by imports from Canada, and a decline in both exports to Mexico and via LNG helps to explain some of the discrepancy between the two storage weeks, the analyst said.

However, “the big story is that gas demand fell by around 40 Bcf compared to the week of March 12 despite that it was actually a few degrees colder,” Fell said. “We are witnessing a demand destruction event of epic proportions. Weather-adjusted power loads are down 10% or more in the Northeast, Midwest and California (areas that have been hit the hardest by Covid-19) while various industrial indicators have also declined sharply over the last few weeks. This massive demand shock occurring now is driving the extreme looseness that we are seeing today.”

June crude oil futures were trading 53 cents higher at $17.03/bbl at around 8:30 a.m. ET, while May RBOB gasoline was off about a penny to around 63.4 cents/gal.