After climbing in morning trade, August natural gas futures bulls were aided in their quest ever so slightly Thursday as the Energy Information Administration (EIA) reported that a pedestrian 65 Bcf was injected into underground storage for the week ended July 13. As a result, the August contract worked higher to close out at $6.706, up 17.8 cents from Wednesday’s regular session finish.

The August contract, which was trading at $6.620 in the minutes just prior to the report’s 10:30 a.m. EDT release, jumped to $6.690 just a few minutes following the release. After sinking back below $6.600 later in the morning, the prompt month rebounded once again to settle.

While coming in within expectations, the injection was decidedly on the low end of the spectrum. Prior to the report, industry estimates appeared to be looking for a build in the high 60s Bcf to low 70s Bcf range. A Reuters survey of 22 estimates produced an average estimate of a 68 Bcf injection.

Citigroup analyst Tim Evans expected a 70 Bcf build. “Although this report is constructive — at the low end of the expected range, a step down from the prior 106 Bcf figure and below the 76-Bcf five-year average benchmark — we remain concerned that subsequent reports will look quite bearish compared to a year ago,” he said. “Without more consistent support from a storage trend, the upside remains dependent on eventual hurricane threats to production from the Gulf of Mexico.”

Jay Levine, a broker with enerjay LLC, said the report might rattle the cages of those that might be bullish in this market. “A 65 Bcf injection falls on the low-end of expectations and, who knows, might even wake up the sleeping (more like hibernating) bull or, at the least, make some people think,” Levine said. “Supply’s not the issue — not now, not then — but who knows what evil lurks in the hearts of men, and what the future brings?”

Some industry players said regardless of what the storage report had to say, bulls already had their minds made up. “Natural gas is trying to make a bottom,” said Phil Flynn of Alaron Trading in Chicago. He contends that tropical wave activity in the Atlantic is “getting a bit more active” but admits that there are no signs of tropical storm development. He said “it is another reason not to be to aggressively short, and it does not hurt the bullish gas cause to see crude oil on a tear.” August crude oil jumped $1.03 on Wednesday and added an additional 87 cents on Thursday to close out at $75.92/bbl.

One problem for supply bulls who contend warm weather is likely to temper forthcoming injections is that the National Weather Service (NWS) expects similar accumulations of cooling degree days (CDD) in major energy markets for the week ended July 21 as were tallied for the week ended July 14. For the week ended July 21, the NWS is predicting 68 CDD for New York, New Jersey and Pennsylvania, or 10 more than normal. For the Midwest states of Ohio, Michigan, Indiana, Illinois and Wisconsin, 65 CDDs are expected, or eight more than normal.

For the week ended July 14, the Mid-Atlantic states above recorded 69 CDD, or 14 more than normal, and the Midwest endured 58 CDD, or three more than normal.

Natural gas supply continues to look more than ample. According to the EIA, working gas in storage stood at 2,692 Bcf as of July 13. Stocks are 63 Bcf less than last year at this time and 365 Bcf above the five-year average of 2,327 Bcf. The East region injected 48 Bcf for the week while the West and Producing regions chipped in 10 Bcf and 7 Bcf, respectively. With stocks at 2,692 Bcf as of July 13, injections of only 51 Bcf per week are needed to bring inventories to a record 3,452 Bcf by the end of the traditional injection season at the end of October.

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