Nymex natural gas futures were trading down sharply after the U.S. Energy Information Administration (EIA) on Thursday reported two weeks’ worth of natural gas storage data that landed bearishly outside expectations. EIA reported a net withdrawal of 6 Bcf of natural gas from storage in the week ended Nov. 3, lower than expected, and an injection of 60 Bcf in the week ended Nov. 10, which came in above estimates.
Ahead of the 10:30 a.m. ET report, December Nymex futures were trading 2.8 cents lower at around $3.162/MMBtu. After the EIA print hit the screen, the contract traded as low as $3.028. By 11 a.m. ET, the November Nymex contract was trading at $3.080, 11.0 cents lower than the prior day’s close.
Traders were on edge before the unusual doubled-up print. EIA reported both weeks in a single report Thursday after a planned systems upgrade last week delayed the release of the data for the week ending Nov. 3.
‘Excitement In The Air’
“It's kind of like early Christmas, two reports at once,” East Daley Analytics’ Jack Weixel, a natural gas analyst, said during a presentation on Enelyst, an online energy chat. “Lots of excitement in the air.”
Before the storage report was issued, NGI modeled a 9 Bcf withdrawal for the week ended Nov. 3, versus a five-year average injection of 36 Bcf. Estimates submitted to Reuters for the period ranged from a 20 Bcf withdrawal to an injection of 21 Bcf, with a median 7 Bcf pull.
For the week ended Nov. 10, NGI modeled a 43 Bcf build, versus a five-year average 20 Bcf injection. The median estimate submitted to Reuters was for an injection of 42 Bcf. Bloomberg’s poll spanned injection estimates of 33 Bcf to 49 Bcf and also produced a median 42 Bcf build. The average from The Wall Street Journal’s survey came out to a 34 Bcf injection.
The increase for the latest week ended Nov. 10 lifted inventories to 3,833 Bcf, a surplus of 203 Bcf to the five-year average of 3,630 Bcf and above the year-earlier level of 3,635 Bcf.
A blast of cold air that sent natural gas demand soaring in the week ended Nov. 3 had been expected to push the week into withdrawal territory. However, the weather quickly warmed up to push expectations for the following week back to injections.
The EIA data showed all regions – except the Midwest – showed withdrawals in the week ended Nov. 3. For the week ended Nov. 10, though, all regions built their storage levels.
For the week ended Nov. 3, the South Central region led declines, registering a withdrawal of 8 Bcf, which included an 8 Bcf withdrawal in nonsalt facilities and zero change in salts. EIA noted that totals do not always equal the sum of components because of independent rounding.
The Midwest registered an injection of 5 Bcf for the Nov. 3 week, while the East posted a draw of 1 Bcf, and Mountain region stocks fell by 2 Bcf. Pacific inventories fell by 1 Bcf.
For the week ended Nov. 10, South Central led all builds with an injection of 32 Bcf. That included a 13 Bcf build in nonsalts and an increase of 19 Bcf in salts. The Midwest followed with an 11 Bcf injection. Inventories grew by 7 Bcf in the East, 3 Bcf in the Mountain region and 8 Bcf in the Pacific region.
Early estimates submitted to Reuters for the week ending Nov. 17 ranged from a withdrawal of 20 Bcf to an injection of 16 Bcf, with an average build of 5 Bcf. That compares with a withdrawal of 60 Bcf a year earlier and a five-year average of 53 Bcf.
The early estimates ranged from a withdrawal of 20 Bcf to an injection of 16 bcf, with an average increase of 5 Bcf. That compares with a withdrawal of 60 Bcf during the same week last year and a five-year average decrease of 53 Bcf.
Ahead of the combined report on Thursday, analysts at the Mobius Risk Group drew their bearish lines for both weeks. Anything below a 3 Bcf withdrawal for the week ended Nov. 3 or above a 45 Bcf injection for the week ended Nov. 10 would signal to them that there was more supply than expected.
A build of more than 45 Bcf for the week ended Nov. 10 “would be hard to view as anything but bearish and in line with recent production increases,” the analysts said.
