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EIA Data ‘Front and Center’ as Natural Gas Futures Called Higher Early


Natural gas futures nudged higher early Thursday as traders awaited the latest round of government inventory to help determine the next move for prices. The October Nymex contract was up 5.0 cents to $4.855 at around 8:50 a.m. ET.

NGI Morning Natural Gas Price & Markets Coverage

Surveys ahead of this week’s U.S. Energy Information Administration (EIA) storage report, scheduled for 10:30 a.m. ET, have been pointing to a build in the mid-70s Bcf. 

Results of a Reuters survey ranged from injections of 58 Bcf to 82 Bcf, with a median build of 76 Bcf. Bloomberg’s survey as of early Thursday showed a 75 Bcf median, with estimates from 68 Bcf to 83 Bcf. 

NGI’s model predicted an 82 Bcf build for the latest report, which covers changes during the week ended Sept. 17. In the year-ago period, EIA recorded a 70 Bcf injection for the similar week, while the five-year average injection is 74 Bcf.

Last week, EIA reported an 83 Bcf injection that lifted inventories to 3,006 Bcf as of Sept. 10, 7.1% below the five-year average of 3,237 Bcf.

“We expect volatility to return the next several sessions, aided by today’s EIA weekly storage report,” NatGasWeather said in a note to clients early Thursday. “…It was warmer than normal over most of the U.S. besides the slightly cool and soggy Northwest and Gulf Coast where weather systems tracked through. We expect a 75-76 Bcf build, although with lower confidence due to impacts from tropical system Nicholas.”

Continued weakening in the October weather forecast, affecting the third and fourth upcoming storage reports, could limit upside for prices, according to analysts at EBW Analytics Group.

“Fundamentally, the storage deficit versus the five-year average may shrink 50 Bcf over the next five weekly storage reports,” the EBW analysts said. 

The latest EIA report “will be front and center this morning,” the analysts added. “…The steep ramp-up in refinery runs noted in yesterday’s crude report may signal returning Gulf Coast industrial demand and low-side risk to our 76 Bcf projection.”

Looking at overnight adjustments to the temperature outlook, NatGasWeather observed mixed trends from the major weather models.

“The weather data remain exceptionally bearish the next 15 days…it would be difficult to trend more bearish as the lightest demand of the year arrives the next few weeks” amid “perfect highs of upper 60s to 80s” for most of the United States, NatGasWeather said. 

Determining how long these comfortable conditions may continue will be “of great interest” to the market, and the latest data suggested they could extend “at least another 15-20 days” into early October, the firm said.

“Front month prices have shed an impressive 90 cents since mid-last week,” NatGasWeather said. “As such, we wouldn’t be surprised if there was a snap-back rally at some point since bulls have had a propensity to step in to buy all dips the past five months.”

November crude oil futures were unchanged at $72.23/bbl at around 8:50 a.m. ET.



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