Undeterred by the prospect of a hefty triple-digit build in the latest round of government inventory data, natural gas futures rode their recent upward momentum to early gains Thursday.
After climbing 9.3 cents in the previous session, the November Nymex futures contract was up another 19.0 cents to $7.120/MMBtu at around 8:40 a.m. ET.
Predictions ahead of the Energy Information Administration’s (EIA) 10:30 a.m. ET natural gas storage report point to a net injection in the triple digits for the week ended Sept. 30.
A Bloomberg survey of seven analysts produced a range of injection estimates from 95 Bcf to 129 Bcf, with a median build of 125 Bcf. Reuters polled 15 analysts, whose estimates ranged from injections of 94 Bcf to 131 Bcf, with a median forecast of 111 Bcf.
The EIA recorded a build of 114 Bcf during the same week a year ago, while the five-year average stands at 87 Bcf.
“After reported high-side surprises from the past two weeks — and uncertainty from Hurricane Ian’s gas demand destruction — risks remain elevated,” EBW Analytics Group analyst Eli Rubin said of the upcoming EIA report. “A storage build near the top of the range may set a new autumn record and could pressure the nascent push higher.”
NatGasWeather noted warmer than normal temperatures over the West, Plains and Texas during the latest EIA report period, with cooler than normal conditions in the Great Lakes, Ohio Valley and Northeast.
“We expect a build of 120 Bcf,” the firm said.
Looking at the overnight weather data, the American modeling advertised lower demand by showing less cooler air pushing in from Canada next week into the following week, NatGasWeather said.
The upcoming pattern remains bearish given “larger than normal builds remain lined up several more weeks deep,” the firm added.
In terms of factors potentially putting upward pressure on prices as of early Thursday, “immediate-term gas demand will rise into the weekend, technicals are supportive of extended gains and seasonal upside risks outweigh downside,” EBW’s Rubin said.
Still, storage builds over the next few weeks are poised to shrink the deficit to the five-year average, the analyst said. This coupled with a “lack of cold weather may postpone attempts for Nymex gas to breakout to the upside.”
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October 06, 2022 at 08:00PM
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Technical, Seasonal Factors Seen Favoring Bulls as Natural Gas Futures Extend Gains Early - Natural Gas Intelligence
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