While many had been calling for a bullish natural gas storage injection, the 39 Bcf build reported Thursday morning for the week ended April 29 was lower than expected. As a result, June natural gas futures received a short boost once the Energy Information Administration (EIA) report hit the street.

Following the 10:30 a.m. EDT report, prompt-month futures immediately jumped 12 cents to $6.70 from its pre-report trading level. Following a high trade of $6.72 just before 11:30 a.m., June natural gas slumped lower in the afternoon to record a $6.57 low for the session before ramping back up to settle at $6.691, up 6.1 cents from Wednesday.

“The market is range trading between the mid-$6.70s to the mid $6.40s,” said Tom Saal of Commercial Brokerage Corp. in Miami. He advised his clients to “trade the range” while noting that June natural gas “may be building a bottom.”

Some industry experts said natural gas once again appeared to be following petroleum futures. June crude finished 70 cents higher at $50.83/bbl, while June unleaded gas settled 1.28 cents higher at $1.4792/gallon. June heating oil lost 1.08 cents to close at $1.4437/gallon.

“EIA reported an in-line-with-expectations (perhaps slightly lower than) 39 Bcf injection,” said Advest Inc.’s Jay Levine. “One gets the sense that natgas is mirroring crude and the products,” he added, noting that the storage report was essentially “meaningless” or “less than influential.”

Other industry players argued that while natural gas is currently looking to some of the petroleum products for guidance, crude is not one of them. “I don’t see a change in the bearish natural gas market,” said a trader with Coquest in Dallas prior to Thursday’s trade. He said that although some see the $50 crude oil benchmark as significant, “settling above $50 in the crude oil doesn’t mean a thing, because the market has been on all sides of $50 and I don’t see the significance.”

He added that $48.80 was Thursday’s low and “that is what is important. I don’t think that crude and natural gas have anything to do with each other. Natural gas is more dependent on product prices and the case for there being plenty of petroleum products around can be argued. Has there been a new refinery built in the last 30 years? That’s not going to change. $6.30 is technical support for the June natural gas and a near-term test of that is not out of the cards,” he said.

Regarding the storage injection, it appeared that colder than normal temperatures in the East last week forced the region to only inject 21 Bcf, while the Producing and West regions chipped in 13 Bcf and 5 Bcf, respectively.

The 36 storage estimates included in the Dow Jones survey showed an unusually wide range of predictions from a build of 25 Bcf to a build as high as 81 Bcf. The median expectation was for an on target 39 Bcf injection. The ICAP-Nymex storage options auction, which runs from 3-4 p.m. EDT on Wednesday, revealed a consensus forecast of a 42.5 Bcf injection.

While industry estimates were fairly close, the 39 Bcf injection was bullish versus historical analogs. According to the EIA, 73 Bcf was injected into underground storage for the same week last year and 64 Bcf stands as the five-year average build.

The 39 Bcf injection marked the first time this season that a build has failed to outpace the five-year average. However, there is still no lack of gas in underground storage. Working gas in storage now stands at 1,455 Bcf, according to EIA estimates. Once for a change, the current year’s surplus over historical figures came down. Stocks are now 238 Bcf higher than last year at this time, while the year-over-five-year average surplus fell below 300 Bcf. The surplus to the 1,162 Bcf five-year average now stands at 293 Bcf.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.