Following the announcement of a 72 Bcf storage injection, the June natural gas futures contract jumped 9 cents from $6.27 to trade at $6.36 as of 10:39 a.m, revisiting the high set on Tuesday. However, the contract then worked lower for the entire afternoon, trading within the $6.19-6.29 range, before settling at $6.219, down 9.1 cents on the day.

With its volume coming in a little above the 65 Bcf five-year average and 10 Bcf short of last year’s injection for the week, the Energy Information Administration (EIA) Thursday morning announced that 72 Bcf was put into underground storage for the week ended April 30. The report caught few off guard as the number was in line with historical averages as well as the industry consensus, which was looking for a 70-76 Bcf build.

“I think we had profit-taking by the bulls, as well they should,” said Ed Kennedy of Commercial Brokerage Corp. in Miami. “They had a pretty good run-up this week. The only way you can take a profit if you’re long is say ‘sold,’ and that is what happened today.”

Kennedy said the market’s move currently looks to be a neutral consolidation. He added that the market is currently overbought, and he expects a probe of the lower end of the consolidation in the $6.14 and $6.11 area.

“I realize it is smoke and mirrors, but I have been around for 35 years trading technically, so I am not going to forget technicals. They say we have support at $6.14, so I will go with that for the time being.”

A Washington, DC-based broker said it’s about time that the industry starts to consider a floor of $6. “Natural gas prices started to slip after a strong run to $6.36,” he said. “This was a full 50% retracement from the high in January to March’s low. The sell-off has been stopped cold by continued strength in oils. Natural gas markets are fast running out of opportunities to buy cheap for winter. We are leaving the spring shoulder [months] and face new demand for cooling.”

Commenting further on the storage report, Kennedy said, “It was in line with expectations and the averages. We’ve got plenty of gas in storage for this time of year — almost 400 Bcf more than last year. I am trying to make the case that there is plenty of gas around; it is all smoke and mirrors.”

Injections were led by the East region, which contributed 38 Bcf. The Producing region added 26 Bcf and the West chipped in 8 Bcf. In the East Region, stocks currently sit 41 Bcf below the five-year average of 610 Bcf, while the Producing region is now 37 Bcf above the five-year average of 438 Bcf. Stocks in the West region are 24 Bcf below the five-year average.

The EIA reported that working gas in storage now stands at 1,227 Bcf, or about 391 Bcf higher than last year’s 836 Bcf. With each recent report, storage has eaten away at its deficit compared to the five-year average. With the injection last week, storage went from 34 Bcf below to 27 Bcf below the five-year average of 1,254 Bcf.

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