Natural gas futures hovered close to even early Thursday as traders and analysts awaited the latest government inventory data in hopes of shedding more light on Hurricane Ida’s impacts on supply and demand. Adding to an impressive 34.6-cent rally in the previous session, the October Nymex contract was up 1.4 cents to $4.928/MMBtu at around 8:50 a.m. ET.

NGI Morning Natural Gas Price & Markets Coverage

Predictions for the latest U.S. Energy Information Administration (EIA) storage report, scheduled for 10:30 a.m. ET, suggest a net injection into Lower 48 gas stocks in the upper 30s or low 40s Bcf.

NGI estimated a 38 Bcf injection into U.S. natural gas stocks for the EIA report, which covers the week ended Sept. 3.

Injection estimates in a Bloomberg poll landed at a median of 39 Bcf. Predictions ranged from 32 Bcf to 58 Bcf. Results of a Reuters survey, meanwhile, ranged from injections of 32 Bcf to 51 Bcf, with a median build of 40 Bcf.

The five-year average for the period is a 65 Bcf injection. The year-earlier build is also 65 Bcf.

Last week, EIA reported an injection of 20 Bcf for the period ended Aug. 27, well shy of the 53 Bcf five-year average.

This week’s report carries “significant uncertainty” over impacts from Hurricane Ida, according to analysts at EBW Analytics Group. The storm’s “impact on opaque industrial demand heightens the risk of a surprise in either direction,” according to the firm.

As of early Thursday Bespoke Weather Services said it observed no major changes to the various supply and demand data points. Production hovered slightly above 90 Bcf/d, representing a “big issue” for the market given the prolonged timeline for restoring Gulf of Mexico output, the firm said.

“The next key data point, obviously, is today’s EIA storage report,” Bespoke said. “This will give us more insight into the demand impacts from Hurricane Ida, which we can use to assist in the estimates for the next couple of weeks.”

A print below 40 Bcf would be “quite bullish” and could send prices even higher, while a higher injection in the neighborhood of 50 Bcf or above “should take prices lower, at least for a while, as demand losses would be negating supply issues,” according to Bespoke.

Meanwhile, coming off Wednesday’s explosive rally in the futures market, the EBW analysts pointed to possible “significant trader short-covering or even potentially fund liquidation” to explain the dramatic move higher. The rally occurred without “a smoking-gun fundamental catalyst,” the analysts said.

“With natural gas fundamentals increasingly price-inelastic above $4.50, elevated price volatility remains likely as price swings exert less fundamental change in supply, demand and storage,” the EBW analysts said. “Market sentiment and algorithmic trading are likely to take on greater importance.”

October crude oil futures were down 46 cents to $68.84/bbl at around 8:50 a.m. ET.