After the latest weekly storage injection overshot estimates and wiped out earlier gains, July natural gas futures were trading modestly higher through midday Thursday.
Here’s the latest:
- July Nymex futures up 4.6 cents to $2.803/MMBtu as of 1:53 p.m. ET, versus earlier high of $2.877
- Reported 98 Bcf weekly Lower 48 storage injection a high-side surprise
The U.S. Energy Information Administration’s (EIA) reported build for the week ending May 31 came in slightly lighter than the five-year average. Total Lower 48 working gas in underground storage exited the period at 2,893 Bcf. That’s 581 Bcf above the five-year average and 373 Bcf higher than year-ago levels, according to EIA.
“This is the second bearish miss in the last two weeks, and this number indicates a fairly significant week/week weather-normalized loosening,” Wood Mackenzie analyst Eric McGuire said Thursday. “Some of this loosening was apparent based on the ramp up in production for this storage week; however, a large portion of this production increase was partially offset by Canadian exports and LNG sendouts.
“This week’s report implies there was more loosening than what we saw in those components.”
Gelber & Associates analysts noted that Nymex futures “reacted swiftly” to the plump EIA print.
The front month erased “most of what was previously a sharp rally made intraday,” the Gelber analysts said.
- Cash prices mixed as cooling demand seen fading into weekend, per NGI’s MidDay Price Alert
- Henry Hub averaging $2.285, up 7.0 cents
NatGasWeather was calling for declining weather-driven demand overall starting Friday and continuing into the middle of next week.
This would occur as a “hot upper ridge shifts over the western half of the U.S. with highs of 80s to 100s,” NatGasWeather said. “At the same time, cooler weather systems will track across the eastern half of the U.S. with highs of mid-60s to 80s for below normal” cooling degree day totals nationally.
