The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 18 Bcf natural gas into storage for the week ended July 26. The result, below expectations, kicked off a tug-of-war between natural gas futures bulls and bears.
The September Nymex contract was up 5.5 cents at $2.091/MMBtu ahead of the 10:30 a.m. ET government report. As the data hit the screen, the prompt month jumped above $2.120. By 11 a.m. ET, gains had narrowed, with the contract up 1.9 cents day/day at $2.055.
Prior to the report, estimates submitted to Reuters ranged from an injection of 22 Bcf to 45 Bcf, with a median of 31 Bcf. NGI modeled a 29 Bcf increase. The EIA report compared with an injection of 15 Bcf a year earlier and a five-year average build of 33 Bcf.
Temperatures were cooler than normal over the eastern half of the country during the report period, lowering demand by nearly 20 cooling degree days week/week, NatGasWeather meteorologist Rhett Milne said on the online energy platform Enelyst.
However, offsetting the weaker demand was wind power generation, which fell to its lowest level of the past year, Milne said. The sluggish wind generation foreshadowed a bullish miss, he said ahead of the print.
By region, the Midwest and East led with injections of 15 Bcf and 14 Bcf, respectively, according to EIA. Pacific inventories fell by 3 Bcf, while Mountain region stocks added 2 Bcf.
In the South Central region, some analysts appeared surprised by the drawdown in gas stocks. Inventory levels fell by 10 Bcf, including draws of 6 Bcf from salts and 3 Bcf from nonsalt facilities. Totals may not equal the sum because of independent rounding, EIA said.
”Nobody saw a draw in nonsalt,” The Desk's John Sodergreen, editor-in-chief, said.
After digesting the data, the market appeared to discount the South Central draw. The market “has a mind of its own. Just wrote this number off,” a market participant said on Enelyst.
Looking ahead to the next EIA print for the week ended Aug. 2, preliminary estimates submitted to Reuters ranged from injections of 11 Bcf to 39 Bcf, with an average increase of 30 Bcf.
