The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 98 Bcf natural gas into storage for the week ended May 31. The result was higher than expected and erased most of the day/day gains for Nymex natural gas futures.
Ahead of the 10:30 a.m. ET print, the July Nymex futures contract was up about 9 cents at $2.847/MMBtu. The prompt month sank to $2.775 after the EIA data was released. By 11 a.m. ET, it remained near that level, up 2.0 cents day/day at $2.777.
The storage print increased Lower 48 inventories to 2,893 Bcf. However, the build lagged the five-year average gain of 103 Bcf and trimmed the surplus gas in storage slightly to 581 Bcf, or 25% above the historical average.
The print followed a lighter-than-average injection of 84 Bcf last week.
Prior to Thursday’s report, injection estimates submitted to Reuters ranged from 85 Bcf to 95 Bcf, with a median of 90 Bcf. Bloomberg’s survey netted a range of 85 Bcf to 97 Bcf and a median of 92 Bcf.
NGI modeled a build of 97 Bcf. The year-ago injection was 105 Bcf.
Ahead of the report, NatGasWeather said light demand over the Memorial Day holiday weekend would help to boost the injection. The weather was warmer than normal over the southern and eastern portions of the country and slightly cooler than normal in the West and North Plains, the forecaster said.
Market participants on online platform Enelyst agreed that the holiday may have had an effect. “I’m a bit surprised the market hasn’t written today’s injection off as just holiday looseness,” one said.
Thursday’s print drew attention back to production, particularly in the East where pipeline scrapes suggest EQT Corp. has reversed some curtailments. Lower 48 production crept up in the second half of May, exceeding the century mark for the first time since early April. In the covered week, production hovered around 100 Bcf/d, Wood Mackenzie data showed.
By region, the East led with an injection of 37 Bcf. Midwest stocks were up 29 Bcf. In the South Central region, inventories rose 18 Bcf. That included a build of 6 Bcf for salts and 13 Bcf for nonsalt facilities. Totals may not equal the sum because of independent rounding, EIA said.
Mountain region stocks added 8 Bcf. Pacific inventories gained by 6 Bcf.
Looking ahead to the week ending June 7, early estimates submitted to Reuters ranged from injections of 61 Bcf to 90 Bcf, with an average increase of 75 Bcf. Knocking down the injection pace is severe heat from California to Texas, which may be boosting cooling demand this week.
Natural gas-fired power demand was expected to decline Friday into the middle of next week as cooler conditions took over in the East, NatGasWeather said. However, a hotter-than-normal weather pattern in the second half of June could help draw down the EIA storage surplus to the five-year average to around 450 Bcf, according to the firm.
