Muted Response from Natural Gas Futures After EIA Reports On-Target 35 Bcf Injection

The U.S. Energy Information Administration (EIA) on Thursday reported an on-target 35 Bcf injection into domestic storage facilities for the week ending Aug. 11, a surplus-trimming result that solicited only a muted response from natural gas futures traders.

Futures climbed early Thursday as traders awaited the latest government inventory report, paring losses recorded over the previous two sessions. In the immediate response to EIA’s 10:30 a.m. ET report, September Nymex prices pulled back a couple cents, trading in the $2.630/MMBtu neighborhood.

By 11 a.m. ET, the front month was trading around $2.646, up 5.4 cents day/day but off a penny or so versus the pre-report trade.

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The 35 Bcf print was right in line with pre-report expectations. The average of 14 injection estimates submitted to Reuters had shown a 34 Bcf build, with predictions ranging from 29 Bcf to 39 Bcf. NGI had modeled a 36 Bcf injection.

The latest EIA report trimmed the surplus to the five-year average by 6 Bcf week/week to 299 Bcf. Total Lower 48 working gas in underground storage stood at 3,065 Bcf as of Aug. 11, or 10.8% higher than the five-year, according to EIA.

Amid scorching heat over much of the Lower 48, injections have now landed on the tighter side of the prior five-year average injection rate for six straight weeks. The last weekly injection to come in looser versus the five-year average was for the week ending June 30, when the surplus had swelled to around 370 Bcf, EIA data show.

Live discussion on energy chat platform Enelyst suggested the latest EIA release had offered few surprises, failing to move the needle either way in terms of market sentiment.

Regional storage dynamics for the week ending Aug. 11 showed a split between withdrawals in the South Central and injections elsewhere. Salt stocks decreased by 12 Bcf week/week, with nonsalt storage also showing a net withdrawal, down 3 Bcf for the period, according to EIA.

Elsewhere, the Midwest and East regions posted double-digit injections for the period of 19 Bcf and 17 Bcf, respectively. The Mountain region saw a 6 Bcf net injection, with the Pacific injecting 7 Bcf, EIA data show.For the week-earlier period, EIA reported a 29 Bcf injection for the period ending Aug. 4, which coincided with a sharp pullback in prices.

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