Coming in well within the range of both industry forecasts and historical comparisons, the Energy Information Administration (EIA) reported Thursday morning that 92 Bcf was injected into underground storage for the week ended June 24.

Because the report came in where it was expected, there was not so much as a blip on the August natural gas futures chart at the time. Just prior to the report, prompt month natural gas was trading at $6.990. Immediately following the report’s 10:30 a.m. EDT release, the contract was trading at $6.995.

August natural gas stayed within a $6.910 to $7.125 range during the day before settling at $6.981, down 10.6 cents. Crude futures maintained a downward slide. After recording a $60.95/bbl high on Monday, August crude found itself sliding for the third consecutive day Thursday, finishing 76 cents lower at $56.50/bbl.

“There was minimal fluctuation around the storage number released, but it sort of stabilized, and then later in the afternoon it sold off,” said a Washington, DC-based broker. “Both natural gas and crude futures really seemed to be following the same trajectory Thursday. They were really trading in lock step for a majority of the day.

“On the natural gas side, we did get through that $6.96 support level, but we ended up settling above it,” he added. “So you could say we are hanging on to support by the skin of our teeth. By managing to close above that level, it leaves a little hope that we might still carve support out here without lurching down another 10 cents or so. If we do see an upcoming settle below that $6.96 level, I would think it would open up that $6.70 to $6.80 zone.

The broker said he gives August natural gas a 50-50 chance of breaking down into the $6.80s and trying to find a base down there. “It hasn’t broken that $6.96 yet, so you can’t call the champ down and out until he is really down and out.” On the flip side, the broker noted that it would be pretty easy for the “market to bid this thing up” if it was able to put a couple of solid weeks of warm weather together. “I think that fear factor in the background is part of what is holding this thing up,” he said.

Calling the injection “within expectations,” but possibly “a tad on the bearish side,” Advest Inc.’s Jay Levine said Thursday morning that he believes sides are being sharply drawn up here. “You have an ever-growing bearish contingent, helped by the recent drop in crude oil prices no doubt, who once again believe natgas prices are set to fall (a lot), versus those who are espousing a ‘friendlier’ if not bullish posture, based on expectations of summer heat and/or the potential for hurricane/storm damage, if not shut-ins.”

After coming in well below all of the other storage estimates — and the actual injection — for the previous week’s report (see Daily GPI, June 24), the ICAP-Nymex storage options auction on Wednesday got it right for this report. The auction produced a consensus forecast of a 90.5 Bcf injection. The 92 Bcf actual injection matched last year’s build for the week and came within a Bcf of the five-year average injection of 91 Bcf.

Working gas in storage now stands at 2,123 Bcf, according to EIA estimates. Stocks are now 198 Bcf higher than last year at this time and 272 Bcf above the five-year average of 1,851 Bcf.

Despite significant heat last week, the East region led the injection charge by putting 63 Bcf into underground stores. The Producing and West regions contributed 20 Bcf and 9 Bcf, respectively.

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