Natural gas futures prices stabilized in early trading Thursday as the market continued to mull a leaner-than-expected injection in the latest round of government inventory data. Coming off a 9.9-cent sell-off in the previous session, the December contract had clawed back 6.3 cents to trade at $4.943/MMBtu as of 8:50 a.m. ET.
Having endured a “wave of mass selling this week,” prices were “showing some strength” in early trading Thursday, Bespoke Weather Services observed.
The firm noted only minor day/day changes across various fundamental indicators, while any differences in the latest weather-driven demand outlook were “negligible.”
The Energy Information Administration (EIA) on Wednesday reported a net 7 Bcf injection into U.S. gas stocks for the week ended Nov. 5. The print, released a day earlier than normal because of the Veterans Day holiday, fell slightly to the bullish side of predictions ahead of the report.
Total Lower 48 inventories stood at 3,618 Bcf as of Nov. 5, 3.2% below the 3,737 Bcf five-year average, according to EIA.
This week’s print also marked the first time since the week ended Sept. 10 that the reported build lagged the five-year average injection rate. The 7 Bcf injection was well below the 26 Bcf five-year average for the period.
“Yesterday’s EIA number reflected tighter supply/demand balances, but much of that was likely due to very low wind, which will not be a factor in next week’s number,” Bespoke said. “In short, it is difficult to be anything other than neutral in near-term sentiment, though we will need to see some actual cold show to ultimately avoid moving lower in prices.”
In terms of details in the overnight guidance, NatGasWeather highlighted continued heating degree day losses from the American Global Forecast System (GFS) overnight, with the model having lost over 10 HDD over the prior two days.
“The GFS is now bearish leaning overall for the coming 15 days instead of being closer to seasonal a couple days ago,” NatGasWeather said. However, the European model “gained 2-3 HDD and is now currently colder compared to the GFS by 6 HDD for late next week into the following week.”
While not a “huge difference” between the two model outlooks, it “needs resolving, since if the European trends warmer to better match the GFS for Nov. 18-22, this could lead to disappointment,” the firm added.
The colder look from the European model may have contributed to higher Henry Hub prices in early trading, though the market appeared to be responding to gains in Dutch Title Transfer Facility prices, according to NatGasWeather.
December crude oil futures were down 56 cents to $80.78/bbl at around 8:50 a.m. ET.
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November 11, 2021 at 09:05PM
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Modest Early Gains for Natural Gas Futures as Changes to Weather Outlook Seen as Minor - Natural Gas Intelligence
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