The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 74 Bcf of natural gas into storage for the week ended June 7. The result was in line with expectations, but a bearish revision to last month’s storage levels sent futures lower.
Ahead of the 10:30 a.m. ET print, the July Nymex futures contract was trading about 6 cents off the previous day’s settlement at $2.984/MMBtu. After the EIA data was released, the July contract sank below $2.900 level. By 11 a.m. ET, the contract had narrowed the decline, trading at $2.944, down 10.1 cents day/day.
The storage print increased Lower 48 inventories to 2,974 Bcf, putting the surplus in storage at 573 Bcf, or 24% above the five-year average. The 74 Bcf build came as EIA revised storage data for the past five weeks.
Thursday’s print further trimmed storage surpluses, which have fallen by 67 Bcf over the past month. The surplus stood at 640 Bcf in the week ended May 3.
Prior to Thursday’s report, injection estimates submitted to Reuters ranged from 66 Bcf to 88 Bcf, with a median of 73 Bcf. A survey by Bloomberg received responses between 70 Bcf and 78 Bcf, with a median of 78 Bcf. NGI modeled a build of 78 Bcf. The estimates compared with a five-year average injection of 89 Bcf and year-ago build of 90 Bcf.
Ahead of the report, NatGasWeather said hotter-than-normal weather across most of the Lower 48 boosted demand during the report week. Cooler conditions were limited to portions of the southern half of the country and the Northeast, the firm said.
The week also reflected the influence of growing power generation from renewable sources. Gas power burns for the report week rose by about 2.5 Bcf/d week/week to an average 36.9 Bcf/d, which was 2% lower than a year earlier, LSEG analyst Saheed Olayiwola said on online energy platform Enelyst. Overall cooling degree days rose 20% year/year, but residential demand for gas fell because of increased generation from wind and solar, he said.
By region, the East led increases with an injection of 28 Bcf. Midwest stocks were up 24 Bcf. In the South Central region, inventories rose 13 Bcf. That included a build of 6 Bcf for salts and 6 Bcf for nonsalt facilities. Totals may not equal the sum because of independent rounding, EIA said.
Mountain region stocks added 6 Bcf. Pacific inventories gained by 3 Bcf.
Looking ahead to the week ending June 14, early estimates submitted to Reuters ranged from injections of 56 Bcf to 91 Bcf, with an average increase of 69 Bcf.
Weather forecasts for the second half of June continued to point to all-time record heat. The net result “will be for surpluses to steadily decline through June, then likely to decrease further in early July,” NatGasWeather said.
