The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 13 Bcf natural gas into storage for the week ended Aug. 30. The result fell far short of historical norms as well as expectations, supporting upward momentum for Nymex natural gas futures.
Ahead of the 10:30 a.m. ET government report, the October futures contract was up 6.8 cents at $2.213/MMBtu. The prompt month rose further to around $2.250 when the EIA data was released. By 11 a.m. ET, it was up 11.6 cents on the day to $2.261.
Prior to the EIA data crossing the wire, NGI modeled a 20 Bcf build. Injection estimates submitted to Reuters ranged from 20 Bcf to 33 Bcf, with a median of 28 Bcf. Bloomberg’s pool produced a similar range and a median of 27 Bcf.
The actual result also proved anemic relative to the prior five-year average increase of 51 Bcf.
“Holy cow,” one participant on the online energy platform Enelyst said, followed by a spate of similar reactions.
“It was near to hotter than normal over the eastern two-thirds of the U.S., while cool versus normal over the western third,” NatGasWeather said of conditions during the reporting week.
Heat in Texas and neighboring states – and sporadic wind energy – proved key to the paltry storage print. The South Central region posted a seasonally steep withdrawal for the latest period, as it has several times this summer. Its 14 Bcf decrease included a draw of 9 Bcf from nonsalt facilities and a pull of 5 Bcf from salts.
Production at the national level also tapered some during the covered period – from around 102 Bcf/d to slightly below that threshold – and helped to keep injections light.
The Midwest and East regions led with injections of 13 Bcf and 7 Bcf, respectively, according to EIA. Mountain region stocks increased by 4 Bcf, while Pacific inventories rose by 2 Bcf.
The increase for last week lifted inventories to 3,347 Bcf, keeping stocks above the year-earlier level of 3,139 Bcf and the five-year average of 3,024 Bcf.
Looking ahead to the next EIA report, covering the first week of September, analysts were generally expecting a seasonally light increase.
Criterion Research analyst James Bevan cited a continued downward trend in production, as it fell below 101 Bcf/d at one point this week, and steady LNG demand. He noted milder weather in the North, though expectations for continued intense heat in the South.
“Plenty of things to keep an eye on,” Bevan said on Enelyst.
Early injection estimates submitted to Reuters for the reporting period ending Sept. 6 averaged 49 Bcf. That compares with a five-year average build of 67 Bcf.
