Losses on natural gas futures accelerate, despite tight storage injection of 7 billion cubic feet of EIA

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The Energy Information Administration (EIA) reported a modest injection of 7 billion cubic feet into natural gas storage for the week ending November 5, triggering a larger sell-off along the Nymex futures curve.

The EIA’s weekly inventory report was released at noon ET on Wednesday, a day earlier than normal due to Veterans Day.

Nymex futures prices fell throughout the morning as weather forecasts continued to lack widespread cold across the country. In the minutes leading up to the EIA report, the December Nymex contract was trading about 6.0 cents lower per day at around $ 4.92 / MMBtu. As the print passed through the trading desks, the speedy month slipped to around $ 4.90 and at 12:30 p.m. was at $ 4.816, down 16.3 cents from Tuesday’s close.

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Independent weather forecaster Corey Lefkof said the 7 billion cubic foot injection occurred as gas-weighted heating degree days (GWHDD) during the reference week reached 100. a- he said on The Desk Enelyst’s online chat.

Prior to the EIA report, a Bloomberg poll found injection estimates ranging from 8 Bcf to 15 Bcf, with a median of 9 Bcf. Reuters’ weekly survey yielded a median construction of 10 billion cubic feet, with a low estimate of 3 billion cubic feet and a high of 15 billion cubic feet. NGI also modeled an increase of 15 billion cubic feet.

For the period of the previous year, EIA recorded an injection of 2 Bcf, and the five-year average is a build of 25 Bcf.

Broken down by region, the Midwest added 4 billion cubic feet in storage, according to the EIA. South Central recorded a net injection of 3 Bcf which included a 4 Bcf increase in salt stocks and a 2 Bcf removal of non-salts. The East also pulled 2 Bcf, while the Pacific climbed 2 Bcf.

Looking ahead to the next EIA report, Enelyst participants have favored an additional injection into stocks before withdrawals become widespread. The first estimates reported to The Desk varied between an injection of 13 Bcf and 30 Bcf.

Enelyst participants attributed the larger planned construction to higher wind production during the current week, which CEO Het Shah said would reduce natural gas production consumption by around 2.5 Bcf / d. In addition, production figures tend to increase this week.

Given the current week’s higher wind production and production gains, the supply / demand balance reflected in the EIA figure is “probably not representative of the actual state of the market”, according to Bespoke Weather Services. The company said prices continued to fall after the report.

“Without a cold, there are still downside risks in the coming weeks,” Bespoke said.

As of Nov. 5, total in-service gas stored was 3,618 Bcf, 308 Bcf less than a year ago and 119 Bcf less than the five-year average, according to the EIA.


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