As traders awaited the latest round of government inventory data, and with weather models continuing to tease a shift to frigid conditions by mid-November, natural gas futures recovered some of their recent losses in early trading Thursday.
After retreating 27.3 cents in the previous session, the December Nymex contract was up 10.5 cents to $5.970/MMBtu at around 8:50 a.m. ET.
Surveys show the market expecting another larger-than-average injection into U.S. natural gas stocks for the Energy Information Administration’s (EIA) 10:30 a.m. ET storage report, which covers changes during the week ended Nov. 4.
Estimates submitted to Reuters ranged from injections of 75 Bcf to 101 Bcf, with a median increase of 83 Bcf. Results of Bloomberg’s survey spanned 66 Bcf to 101 Bcf and landed at a median of 83 Bcf. NGI predicted a build of 68 Bcf.
The five-year average build for the period is 20 Bcf, while EIA recorded a 15 Bcf increase in the year-earlier period.
In the week-earlier period, EIA reported an injection of 107 Bcf for the week ended Oct. 28. That far exceeded the prior five-year average of 45 Bcf and marked the sixth time in seven weeks that EIA printed a triple-digit increase.
Temperatures during the latest EIA report period were “much warmer than normal over the eastern two-thirds of the U.S., while mild over the West,” NatGasWeather said. “We expect a build of 83-84 Bcf.”
Traders will also have to factor in potential impacts from Tropical Storm Nicole. The storm was tracking over central Florida early Thursday, according to the National Hurricane Center (NHC).
“On the forecast track, the center of Nicole will move across central Florida this morning, possibly emerge over the far northeastern Gulf of Mexico this afternoon, and then move across the Florida Panhandle and Georgia tonight and on Friday,” the NHC said.
Natural gas market impacts from Nicole figure to lean bearish as the storm brings “comfortable temperatures and power outages” to the Southeast, according to NatGasWeather.
Meanwhile, the latest forecast trends were mixed, with the American model’s outlook now notably colder than its European counterpart after overnight heating degree day gains, NatGasWeather said.
The American dataset “has been the more accurate model recently by seeing the coming colder pattern earlier,” the firm said.
Starting this weekend and continuing through Nov. 21, forecasts continued to point to stronger than normal weather-driven demand by showing “frosty Canadian air” pushing into the Lower 48 to deliver frigid temperatures over key markets, according to NatGasWeather.
“How much warming follows Nov. 22-25 remains in question, but the trend has been for the weather data to add demand in time,” the firm said.
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November 10, 2022 at 09:12PM
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Natural Gas Futures Pare Losses Ahead of Likely Larger-Than-Average Storage Build - Natural Gas Intelligence
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