The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 10 Bcf natural gas into storage for the week ended July 12.
The result followed scorching Lower 48 heat and robust cooling demand last week. The print came far shy of most analysts’ expectations – driven by a withdrawal in the South Central region – and bolstered a morning Nymex natural gas futures rally.
Ahead of the 10:30 a.m. ET government report, the August futures contract was up 5.0 cents at $2.085/MMBtu. The prompt month rose to around $2.115 shortly after the EIA data was released. By 11 a.m. ET, it was up 8.2 cents to $2.117.
Prior to the EIA data crossing the wire, injection estimates submitted to Reuters ranged from 12 Bcf to 48 Bcf, with a median of 28 Bcf. Bloomberg’s survey spanned a narrower range and landed at a median of 27 Bcf.
NGI modeled a 12 Bcf increase for the latest EIA period. That compared with a five-year average increase of 49 Bcf.
Record or near-record temperatures baked large swaths of the Lower 48 during the EIA period, more than offsetting the demand-destroying impacts of former Hurricane Beryl. The storm knocked out power for hundreds of thousands of Texans after making landfall in the Lone Star state early last week. It also caused damage to LNG facilities and interrupted deliveries of liquefied natural gas.
Wood Mackenzie analyst Eric McGuire said on the online energy platform Enelyst that the covered week featured “some of the highest sustained temps and highest power burns we have seen in the U.S.”
The latest increase lifted inventories to 3,209 Bcf, putting stocks above the year-earlier level of 2,959 Bcf and the five-year average of 2,744 Bcf.
The Midwest and East regions led with builds of 14 Bcf and 4 Bcf, respectively, according to EIA.
The South Central draw of 10 Bcf, however, proved a major offset and included a 9 Bcf decrease in salt storage and 1 Bcf decline in nonsalt facilities.
Mountain region stocks increased by 3 Bcf, while Pacific inventories were flat.
Looking ahead to the next EIA report, covering the week ending July 19, analysts were generally expecting a result roughly in line with historical averages.
Early injection estimates submitted to Reuters ranged from 15 Bcf to 66 Bcf, with an average of 24 Bcf. The estimates compare with an increase of 23 Bcf a year earlier and a five-year average build of 31 Bcf.
