August natural gas futures rallied on Thursday as the Energy Information Administration reported a storage build of 93 Bcf for the week ended June 25. The prompt month climbed 6.2 cents to close at $6.217.

Surprisingly, the storage report — which fell within analysts’ range of estimates — took a back seat on the day as natural gas futures decided to ride the coattails of crude futures yet again. August crude jumped $1.69 to close at $38.74/bbl.

After trading lower in overnight Access trading, natural gas futures on Thursday sprung off of a $6.045 low notched at 10:29 a.m. (EDT) to trade at $6.215 as of 11:30 a.m. The contract peaked at $6.27 before moving back down to its close.

“It’s the crude oil, not the storage,” said Tim Evans of IFR Energy Services. “In general, withdrawals and injections have been bearish relative to this average benchmark dating from the end of February, with bearish variances in 14 of the past 18 weeks. This has certainly kept an overall lid on prices, in spite of an urge for the market to run higher, based on either the strength in crude oil values or the expectation that summer heat and hurricanes will still limit injections.”

The current price rally still has more to do with the strength in the liquids than it does with the storage situation, he said. “We would go with the flow, but have to accept that the fundamentals may not really be strong enough to sustain the advance.”

The 93 Bcf build fell short of last year’s 97 Bcf injection but came in well over the 82 Bcf five-year average build. As a result, the deficit to the five-year average has been erased for the second time this season as current stocks now stand 10 Bcf above the average.

Both Evans and Kyle Cooper of Citigroup saw the weekly injection fell within their estimated ranges. Evans said he was looking for a 90-100 Bcf net injection, while Cooper called for a similar build of between 89 and 99 Bcf. Lehman Brothers’ Thomas Driscoll had called for a 95 Bcf injection.

“Our estimates reflect our view that (weather-normalized) injection rates will average 2.1 Bcf/d less than last year (this is the average variation experienced over the past twelve weeks) in the coming weeks,” Driscoll said. “We estimate that if this trend were to continue, storage could exit the refill season (Nov. 1) at a ‘neutral’ level slightly below 3,100 Bcf, [but] higher than the five-year average of 3,054 Bcf.”

Driscoll noted that based on both heating and cooling degree days, this season to date has been warmer than the 30-year norm. He added that based on cooling degree days, the National Oceanic and Atmospheric Administration forecasts 8% cooler temperatures over the coming week. “We believe cooling degree days will be more important than heating degree days over the remainder of the refill season,” he said.

Working gas in storage now stands at 1,938 Bcf, which is 276 Bcf higher than last year at this time. The East region contributed 62 Bcf to the injection, while the Producing and West regions chipped in 18 Bcf and 13 Bcf, respectively.

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