The U.S. Energy Information Administration (EIA) reported an injection of 107 Bcf natural gas into storage for the week ended Oct. 28. The result exceeded expectations and more than doubled the prior five-year average, adding pressure to already slumping Nymex natural gas futures.
The “whopping” build, as one participant on the online energy platform Enelyst called it, marked the sixth triple-digit increase in the past seven weeks and eased any lingering worries about ample supplies for the coming winter.
After jumping 55.4 cents on Wednesday, the December futures contract was down 20.2 cents at $6.066/MMBtu just prior to the 10:30 a.m. ET inventory report.
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The prompt month fell further to $6.048 when the EIA data was released. By 11 a.m., it had clawed back some but was still down 16.8 cents to $6.100.
Prior to the EIA report, major polls found analysts expecting a build around 100 Bcf.
Estimates submitted to Bloomberg showed injection expectations ranging from 87 Bcf to 109 Bcf, with a median prediction of 102 Bcf. Results of a Reuters poll landed at a median of 99 Bcf, with estimates spanning 81 Bcf to 109 Bcf.
Predictions reported to the Wall Street Journal ranged from increases of 84 Bcf to 109 Bcf, with an average of 98 Bcf. NGI estimated a 110 Bcf increase.
The build in the comparable week of 2021 was 66 Bcf, and the five-year average was 45 Bcf, according to EIA.
The 107 Bcf injection for last week lifted inventories to 3,501 Bcf, pushing stocks close to the year-earlier level of 3,602 Bcf and the five-year average of 3,636 Bcf.
By region, the South Central injection of 44 Bcf led all others and included a 22 Bcf increase in nonsalt facilities and a 22 Bcf build in salts. Analysts on Enelyst noted mild weather and strong wind generation that diminished gas demand in Texas and cleared the path for a large increase in storage.
The Midwest and East followed with injections of 35 Bcf and 23 Bcf, respectively, according to EIA.
Mountain region stocks increased by 5 Bcf. Pacific inventories declined by 1 Bcf.
Looking ahead to next week’s EIA print, analysts are anticipating another hefty increase, given ongoing benign weather across much of the Lower 48 and strong production levels through the fall.
Early estimates for the week ending Nov. 4 submitted to Reuters ranged from injections of 65 Bcf to 105 Bcf, with an average increase of 81 Bcf.
That compares with an injection of 15 Bcf during the same week last year and a five-year average build of 20 Bcf.
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