The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 10 Bcf of natural gas into storage for the week ended Nov. 24. The result landed above expectations and sent Nymex natural gas futures lower.
Ahead of the 10:30 a.m. ET report, December Nymex futures were trading up a penny at $2.814/MMBtu. After the EIA print hit the screen, the contract sank to $2.761. By 11 a.m. ET, the November Nymex contract was trading at $2.794, a penny below the prior day’s close.
Before the storage report was issued, NGI modeled a withdrawal of 9 Bcf. The five-year average was a withdrawal of 44 Bcf. A year earlier, the agency reported an 80 Bcf draw.
Estimates submitted to Reuters ranged from a withdrawal of 31 Bcf to an injection of 7 Bcf, with a median draw of 14 Bcf. Bloomberg’s poll received estimates from a 17 Bcf draw to a 10 Bcf build and produced a median 9 Bcf withdrawal.
The increase for the latest week lifted inventories to 3,836 Bcf, a surplus of 303 Bcf to the five-year average of 3,533 Bcf and about 10% above the year-earlier level of 3,495 Bcf.
Weather in the latest period was colder than the previous week ending Nov. 17, for which the EIA reported a bullish 7 Bcf withdrawal versus expectations for a small injection. The week before that, the agency reported a decidedly bearish 60 Bcf injection for the period ending Nov. 10.
However, the latest period was still warmer than usual, wind generation was a little stronger than the previous week, and the Thanksgiving holiday lightened demand, NatGasWeather meteorologist Rhett Milne said ahead of the print on the online platform Enelyst. “Essentially, there are reasons today’s report misses bearish.”
The EIA data showed two of five regions built stocks in the week. The South Central region led with an injection of 20 Bcf. That included an 8 Bcf build in nonsalt facilities and a build of 12 Bcf in salts. EIA noted that totals do not always equal the sum of components because of independent rounding.
Pacific inventories were also higher, up by 2 Bcf.
Meanwhile, the Midwest led declines, with its stocks down 7 Bcf. Inventories in both the East and Mountain regions fell by 3 Bcf, respectively.
Looking ahead to the next storage report for the week ending Dec. 1, analysts expect this week’s blast of cold to shift storage trends back firmly into withdrawal territory.
Early estimates submitted to Reuters ranged between withdrawals of 16 Bcf to 134 Bcf, with an average decrease expectation of 101 Bcf. That compares with a withdrawal of 30 Bcf a year earlier and a five-year average decrease of 48 Bcf.
Ahead of the print, NatGasWeather said this week’s cold snap could drop storage surpluses back near 235 Bcf relative to the five-year average. “However, if the Dec. 1-13 period doesn’t trend colder, surpluses will balloon over +300 Bcf, then continue to increase unless colder patterns arrive Dec. 14-20.”
