June 5 (Bloomberg) -- Natural gas futures fluctuated in New York before a weekly report that may show a larger-than-average stockpile increase.
Gas moved between gains and losses as government data scheduled for release tomorrow in Washington may show that inventories rose 99 billion cubic feet in the seven days ended May 31, according to the median of 17 analyst estimates compiled by Bloomberg. The five-year average gain for the week is 92 billion. Supplies rose 63 billion the same week last year.
"This could be the biggest storage injection for a while," said Phil Flynn, a senior market analyst for Price Futures Group in Chicago. "If we see a number in the triple digits, that’s going to put a negative spin on the market."
Natural gas for July delivery fell 0.3 cent to $3.995 per million British thermal units at 1:59 p.m. on the New York Mercantile Exchange. Trading volume was 51 percent below the 100-day average for the time of day. The futures have gained 19 percent this year.
The discount of July to October futures narrowed 0.2 cent to 2.1 cents.
July $4.25 calls were the most active options in electronic trading. They were up 0.4 cent to 3.6 cents per million Btu on volume of 969 lots at 2:18 p.m. Calls accounted for 60 percent of trading volume. Implied volatility for at-the-money options expiring in July was 29.85 percent at 2:15 p.m., up from 28.56 percent yesterday.
"Market participants continue to look for a new signal for guidance for the next directional move," said Dominick Chirichella, senior partner at the Energy Management Institute in New York, in a note to clients today. "The spot futures contract has been stalled in the $3.90 to $4.16/mmbtu trading range for most of the month of May and early June."
Gas inventories totaled 2.141 trillion cubic feet in the week ended May 24, 3.9 percent below the five-year average and 23.7 percent below last year’s level for the period, the Energy Information Administration said in last week’s supply report. Tomorrow’s report is scheduled for release at 10:30 a.m. in Washington.
MDA Weather Services in Gaithersburg, Maryland, said temperatures would be lower-than-average in the Northeast through June 14.