The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 74 Bcf natural gas into storage for the week ended Oct. 20. The result came in shy of expectations and bolstered Nymex natural gas futures.
The Nymex November futures contract was up 1.6 cents at $3.026/MMBtu in early trading and held mostly unchanged at 10:30 a.m. ET. By 11 a.m., it was up 4.1 cents.
“That EIA number, at a minimum, can’t hurt the rally,” StoneX Financial Inc.’s Thomas Saal, senior vice president of energy, told NGI.
He said that, with blasts of freezing air in the cards from the Rockies to the Great Lakes this week, continued strong production may be all that lies between the market and the onset of storage withdrawals in early November. Output reached record levels around 104 Bcf/d this month.
Prior to the EIA report, injection estimates submitted to Reuters ranged from 72 Bcf to 96 Bcf and landed at a median of 79 Bcf. Bloomberg’s survey spanned builds of 76 Bcf to 88 Bcf and generated a median expectation of 81 Bcf. The Wall Street Journal’s poll produced the same range with an average of 79 Bcf.
NGI modeled a 79 Bcf injection. The five-year average injection was 66 Bcf, while the year-earlier build was 61 Bcf.
The increase for the latest week lifted inventories to 3,700 Bcf, keeping stocks ahead of the year-earlier level of 3,387 Bcf and the five-year average of 3,517 Bcf.
The South Central injection of 30 Bcf led all regions and included a 15 Bcf build in nonsalt facilities and an increase of 14 Bcf in salts. EIA noted that totals do not always equal the sum of components because of independent rounding.
The Midwest followed with a 25 Bcf injection. The East posted an increase of 12 Bcf, while Mountain region stocks increased by 4 Bcf, and Pacific inventories rose by 3 Bcf.
Looking ahead to next week, analysts are generally expecting one more strong build relative to the five-year average, given benign weather throughout southern markets, including Texas and the broader South Central region.
Early estimates submitted to Reuters for the week ending Oct. 27 ranged from injections of 71 Bcf to 88 Bcf, with an average increase of 81 Bcf. That compares with an injection of 99 Bcf a year earlier and a five-year average of 57 Bcf.
