The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 70 Bcf natural gas storage for the week ending Sept. 4, aligning with forecasts and easing early pressure on Nymex natural gas futures.
Ahead of the report, a Bloomberg survey found estimates ranging from 60 Bcf to 73 Bcf, with a median of 68 Bcf, while a Reuters poll found estimates ranging from 62 Bcf to 73 Bcf and a median of 69 Bcf. NGI estimated an injection of 71 Bcf.
The latest result compared with an 80 Bcf build a year earlier and a five-year average of 68 Bcf. EIA reported a 35 Bcf injection into storage for the week ended Aug. 28.
Analysts said the increased injection, relative to the prior week, reflected cooler weather conditions across much of the nation’s midsection and lingering power outages from the destruction of Hurricane Laura in late August. Fall weather could drive builds higher in coming weeks.
“Storage is still filling fast, so we are not convinced of a bullish case at the front of the curve right here,” Bespoke Weather Services said.
Prior to the report, the October contract was down 7.8 cents to $2.328/MMBtu. The prompt month moved even lower to around $2.321 when the EIA data was released. By 11 a.m. ET, however, the October contract had recovered ground to $2.382, down 2.4 cents from the prior day’s close.
The build for the Sept. 4 week lifted inventories to 3,525 Bcf, above the year-earlier level of 2,997 Bcf and above the five-year average of 3,116 Bcf, according to EIA.
By region, the Midwest topped all others with a build of 29 Bcf. The South Central followed with an injection of 18 Bcf that included a 13 Bcf injection into nonsalt facilities and a 4 Bcf add to salts. The EIA total does not always equal the sum of components because of independent rounding.
East inventories grew by 16 Bcf, while Mountain and Pacific region stocks each increased by 4 Bcf.
Participants on The Desk’s online energy platform Enelyst forecast increased storage builds over the next three covered weeks. Early expectations call for an injection above 80 Bcf with the report covering the short Labor Day week. Chilly temperatures have permeated the Rocky Mountain region this week, and there is an expectation for a triple-digit build in the final full week of September.
The future builds this month “will be stout,” said one participant on the Enelyst platform. Another noted that, while liquefied natural gas demand this week is “surging higher” as feed gas flows at Cheniere’s Sabine Pass mount after the export terminal reopened following a Laura-imposed shutdown, gains could be “offset by losses in power burn demand as cooler, more fall-like temperatures move in.”
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