The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 78 Bcf natural gas into storage for the week ended May 17. The print was a bullish miss against expectations and historical averages.
The result reflected a demand-side push from a hike in power burns and the early return of Freeport LNG while production remained reduced. The combination supported additional upside for Nymex natural gas futures.
Ahead of the 10:30 a.m. ET print, June futures were down 2.0 cents at $2.822/MMBtu. The prompt month was nudged back to the plus side to around $2.864 when the EIA released the report. By 11 a.m. ET, it was down 9.8 cents at $2.744.
It was a "bumpy day," The Desk's John Sodergreen, publisher, said on the online energy platform Enelyst.
"Fundamentals have had little to do with the current move," a participant on Enelyst said. "This is all about the reflation trade making its way into natural gas. I think it has a lot to go.”
Leading up to the release, a Reuters poll estimated injections from 71 Bcf to 96 Bcf, with an average increase of 89 Bcf. A Bloomberg poll outlined expectations from 78 Bcf to 91 Bcf, with a median injection of 85 Bcf.
NGI modeled an 83 Bcf build. That compared with an increase of 97 Bcf during the same week last year and a five-year average increase of 92 Bcf.
Feed gas flows to U.S. liquefied natural gas facilities averaged 12.4 Bcf/d during the review week, according to Wood Mackenzie data. The firm said power burn averaged 31.4 Bcf/d and spiked to 34.6 Bcf/d on May 16, during the reporting period. Production hovered around 97 Bcf/d.
NatGasWeather meteorologist Rhett Milne said it was warmer than normal over the West and far northern portions of the county and cooler than normal most elsewhere during the review week. Wind energy generation was "decently lighter," and solar generation was "slightly stronger" week/week, Milne said on Enelyst.
Looking ahead, Milne said that strong flows to Freeport LNG, much lighter production and the expectation of a hot summer would tighten balances. Surpluses would “steadily decrease over time,” he said.
The increase from last week brought inventories to 2,711 Bcf, according to EIA. Stocks remained well above the year-ago level of 2,309 Bcf and the five-year average of 2,105 Bcf.
The East led with an injection of 29 Bcf. The Midwest showed a build of 22 Bcf. The South Central build of 15 Bcf included a 9 Bcf increase in nonsalt stocks and a bump of 6 Bcf in salts. EIA noted that totals do not always equal because of independent rounding.
The Pacific inventories rose by 7 Bcf, while the Mountain region injected 6 Bcf.
Early estimates for the EIA report for the week ending May 24 submitted to Reuters ranged from additions of 80 Bcf to 91 Bcf, with an average increase of 89 Bcf. Those early estimates compare with an increase of 106 Bcf during the same week last year and a five-year average increase of 104 Bcf.
