With the natural gas market keeping one eye on upcoming government storage data and the other on a tropical cyclone that could reach the Gulf Coast by this weekend, futures were trading close to even early Thursday. The July Nymex contract was off 0.3 cents to $1.818/MMBtu at around 8:45 a.m. ET.

Morning Markets Coverage

The Energy Information Administration’s (EIA) weekly storage report, scheduled for 10:30 a.m. ET, is expected to show an injection around 110-111 Bcf for the week ending May 29, according to surveys.

A Wall Street Journal poll of 12 analysts, brokers and traders produced injection estimates ranging from 96 Bcf to 122 Bcf, with an average of 110 Bcf. A Bloomberg survey had a tighter range of forecasts with a median of 111 Bcf, while a Reuters survey landed at a 110 Bcf injection. NGI estimated a 104 Bcf build.

Last year, the EIA recorded a 118 Bcf increase in storage for the similar week, while the five-year average build stands at 103 Bcf.

Following Wednesday’s gains, if EIA reports a smaller-than-expected injection it could help prices rise further, analysts at EBW Analytics Group said.

The analysts attributed the recent strengthening in prices to a combination of the arrival of hotter weather, an increase in liquefied natural gas feed gas flows, production declines and potential shut-ins from Tropical Storm Cristobal should it continue on its predicted path toward the Gulf Coast.

“Given the day-to-day fluctuations that are likely to occur at each export facility, it may take a week or more for the market to fully assess the extent to which feed gas flows may decline this month,” the EBW analysts said. “In the interim, natural gas prices are likely to be driven primarily by weather forecast shifts, technical factors and Cristobal’s strength.”

The National Hurricane Center’s 8 a.m. ET advisory showed Cristobal hovering over southern Mexico.

“A turn toward the east and northeast is expected later today, and a subsequent northward motion should occur Saturday,” the forecaster said. “…The center is forecast to move back over the southern Gulf of Mexico Friday or Friday night, over the central Gulf of Mexico on Saturday, and approach the northern Gulf of Mexico coast Sunday and Sunday night.”

As for changes to guidance overnight, NatGasWeather noted degree day additions for both the American and European models.

“Hot conditions continue over Texas and the Southwest, while very warm over the South and Southeast,” the forecaster said. “The northern U.S. will see plenty of mid-80s, including locally 90s again around the Washington, DC, area to aid national power burns to a formidable 35 Bcf-plus the next few days.”

July crude oil futures were down 59 cents to $36.70/bbl at around 8:45 a.m. ET, while July RBOB gasoline was off fractionally to $1.1169/gal.