December Nymex natural gas futures struggled to find direction Thursday as the market was without a key trading catalyst, following the scheduled delay of the latest government storage report. The print, which could mark the first withdrawal of the season, will be a double shot next week, in tandem with this week’s storage results.
The U.S. Energy Information Administration’s (EIA) storage report is usually issued every Thursday at 10:30 a.m. ET and is a closely followed dataset for the natural gas market. EIA reported an injection of 79 Bcf for the week ended Oct. 27, which landed near expectations and lifted Nymex natural gas futures higher.
For the week ended Oct. 27, NGI had modeled a 82 Bcf build. Analyst surveys landed at median builds of 81-82 Bcf. The injection had lifted inventories to 3,779 Bcf, a surplus of 205 Bcf to the five-year average and 293 Bcf above the year-earlier level of 3,486 Bcf.
For the week that ended Nov. 3, analysts were split on whether frigid cold may have pushed the Lower 48 to the first storage withdrawal of the season.
NGI modeled a 9 Bcf withdrawal for the week ended Nov. 3, which would compare bullishly to a five-year average 36 Bcf injection and the 83 Bcf year-earlier build. Meanwhile, estimates submitted to Reuters ranged from a withdrawal of 20 Bcf to an injection of 21 Bcf, with the median landing at a withdrawal of 7 Bcf.
Absent the report, December Nymex futures were trading in a narrow range of gains and losses. In early trading Thursday, the prompt month sank to $3.055/MMBtu, then moved as high as $3.162, before retreating to $3.046 shortly after 10 a.m. ET.
The prompt month traded down to $3.022 around 10:45 a.m., and by 11 a.m., had moved higher to $3.044, down 6.2 cents from the prior session.
Analysts on the online energy platform Enelyst were musing about next week’s double storage report. Some also joked about the lack of insight. “At least when there is no report, I can't bust badly on my estimate,” one analyst said. “Survey says, everyone gets a trophy!” another analyst said.
Looking ahead to the remaining EIA prints for November, an unusually warm bath of weather is expected to deliver more injections. Earlier this week the 15-day forecast was trending as the third warmest mid-November since 1950, Mobius Risk Group said.
If the warm weather were to keep the next three EIA reports in injection territory, it could swell storage levels well above normal, according to Mizuho Securities analysts.
At this time last year, the EIA had two storage builds remaining for the season, Mizuho analysts noted. If the prints were to “extend the injection season for one week longer than last year, there is an outside chance that total natural gas storage could hit 4.000 Tcf or greater for only the second time ever. Needless to say that would be a very negative price development, and not the way to start the winter natural gas season.”
For the week ending Nov. 16, EIA a year ago printed an injection of 66 Bcf , and the five-year average was an injection of 20 Bcf.
