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Natural Gas Futures Hang in the Red as Triple-Digit Storage Injection Eases Supply Concerns
The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 103 Bcf into natural gas storage for the week ended Sept. 16. The result exceeded analysts’ expectations and soothed market concerns about ample supplies for the coming winter, keeping pressure on Nymex natural gas futures.
The build marked the largest of the year, topping by one tick the only other triple-digit increase to date in 2022. EIA reported a 102 Bcf injection for the week ended June 3.
Ahead of the 10:30 ET EIA report, the October natural gas futures contract was down 15.1 cents at $7.628/MMBtu. The prompt month dropped further to around $7.494 when the EIA data was released.
By 11 a.m. ET, the October contract stood at $7.580, off 19.9 cents from the prior day’s close.
Participants on the online energy platform Enelyst pointed to waning weather-driven demand and mounting production during the covered week. Output topped 100 Bcf/d earlier this month – a record level — and has since held near that threshold most days.
“Production, production, production,” one Enelyst participant emphasized.
Prior to the report, major polls showed median estimates hovering around an injection in the 90s Bcf.
Results of Reuters’ poll ranged from predicted increases of 86 Bcf to 99 Bcf, with a median of 93 Bcf. Bloomberg’s survey spanned estimates of 80 Bcf to 104 Bcf, landing at a median expectation for an injection of 95 Bcf.
The Wall Street Journal’s poll produced an average build expectation of 95 Bcf.
EIA reported a year-earlier injection of 77 Bcf and a five-year average injection of 81 Bcf.
The build for the Sept. 16 week lifted inventories to 2,874 Bcf, leaving stocks below the year-earlier level of 3,071 Bcf and the five-year average of 3,206 Bcf.
The Midwest led all regions with a build of 35 Bcf, according to EIA. The South Central posted an increase of 31 Bcf. It included a 19 Bcf injection into nonsalt facilities and an increase of 12 Bcf into salts. The East region posted an injection of 29 Bcf. Mountain region stocks rose by 5 Bcf, while Pacific inventories increased by 2 Bcf.
Looking ahead, early estimates submitted to Reuters for the EIA print covering the week ending Sept. 23 ranged from injections of 65 Bcf to 98 Bcf, with a mean increase of 86 Bcf.
That compares with an injection of 86 Bcf during the comparable week in 2021 and a five-year average build of 77 Bcf.
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