The U.S. Energy Information Administration (EIA) on Wednesday reported a 32 Bcf build of natural gas in storage for the week ended June 28. The result was within the expected range, and included a bearish revision for the prior week, limiting support for Nymex futures.
Ahead of the 12 p.m. ET print, the August futures contract was up 2.0 cents at $2.455/MMBtu. The prompt month ticked lower to $2.452 when the EIA data was released, a day early because of the Fourth of July holiday. About 20 minutes later, the contract stood at $2.456, up 2.1 cents from Tuesday’s settlement.
Prior to the report, NGI modeled a 29 Bcf build. Early estimates to Reuters ranged from builds of 13 Bcf to 76 Bcf, with an average increase of 41 Bcf. The five-year average build was 69 Bcf for the week, while a year ago it was 76 Bcf.
The relatively light build was due to hotter-than-normal temperatures over most of the Lower 48 during the report week, with the Midwest as the main exception, NatGasWeather meteorologist Rhett Milne said.
Milne said, “While it’s been an impressively hot summer so far, and will remain so, surpluses are still quite hefty and won’t drop under 400 Bcf/d until late July.” He noted that solar and wind generation were up over last year. “This seems to have impacted power burns this summer as they have proven to be not as strong as last summer, at least so far.”
The increase for last week lifted inventories to 3,134 Bcf. Stocks remained above the year-earlier level of 2,859 Bcf and the five-year average of 2,638 Bcf. The 32 Bcf build came as the EIA revised storage data up 5 Bcf for the previous week.
By region, the Midwest led increases with an injection of 21 Bcf. East stocks were up 14 Bcf. In the Mountain region, inventories rose 3 Bcf.
Declines were led by the South Central region with stocks down 4 Bcf. That included a decrease of 8 Bcf for salts and 3 Bcf increase for nonsalt facilities. Totals do not always equal the sum because of independent rounding, EIA said.
Pacific region stocks fell 1 Bcf.
EBW Analytics Group Analyst Eli Rubin said looking ahead, after the holiday, rebounding heat and post-holiday demand “may lead to rising power burns and stem the bleeding for natural gas.” The next four EIA storage weeks may average 99 cooling degree days/week, he said.
