The latest natural gas storage report by the U.S. Energy Information Administration (EIA) surprised the market with a bigger-than-expected 92 Bcf injection for the week ended April 19. Natural gas futures initially responded by trading lower before narrowing their day/day decline.
The May Nymex contract was trading 3.6 cents lower day/day at around $1.617/MMBtu in the minutes leading up to the 10:30 a.m. ET government report. As the print hit the screen, the prompt month traded as low as $1.601 before bouncing higher. By 11 a.m. ET, May futures were trading down 1.4 cents from Wednesday’s regular session close of $1.653.
The reported build was higher than the five-year average of 59 Bcf and the year-ago injection of 77 Bcf. The EIA print increased Lower 48 inventories to 2,425 Bcf, swelling the surplus to 655 Bcf, or 37% above the five-year average.
The print also exceeded expectations. Prior to Thursday’s report, NGI modeled an 86 Bcf injection. A Reuters poll spanned injection estimates of 60 Bcf to 89 Bcf, with a median build of 89 Bcf. Bloomberg’s survey generated a median of 83 Bcf.
“Higher she goes,” The Desk's John Sodergreen, editor-in-chief, said on the online energy platform Enelyst. “As expected but not hoped for.”
Strong wind and solar generation during the week were factors driving expectations for a plump build, NatGasWeather meteorologist Rhett Milne said.
The bearish build comes a week after EIA reported an in-line print of a 50 Bcf injection.
By region, the East showed a build of 29 Bcf. South Central stocks were up 28 Bcf, including a build of 9 Bcf for salts and 20 Bcf for nonsalt facilities. Totals may not equal the sum because of independent rounding, EIA said.
Midwest inventories rose 23 Bcf in the week. Mountain region stocks added 6 Bcf. Pacific inventories gained by 5 Bcf.
Market participants on Enelyst said they were closely watching salt inventories, which at 309 Bcf were 24% above the five-year average. “Overall salts are getting full,” a participant said. Still, the weekly build came in lower than some analyst projections.
Looking ahead to the week ending April 26, early estimates submitted to Reuters ranged from injections of 42 Bcf to 95 Bcf, with an average increase of 47 Bcf.
Milne said on Enelyst that wind generation has been strong this spring and could continue with the next storage report. “With weather systems tracking into the central United States the next several days, wind energy generation will be near highs of the year. Winds will moderate next week but still be decently strong.”
