Natural Gas Report: Another Strong Storage Build Spurs Another Setback

October 3, 2013 09:34 AM
 
  • Inventories stand at 3,487 Billion cubic feet (Bcf) -- 4.3% below year-ago and 49 Bcf -- 1.4% -- above the 5-year average of 3,356 Bcf.
  • This week notes a 101 Bcf gain in storage, 6 Bcf larger than expected build.
  • Natural gas prices rose between 9 and 30 cents over the report week at most locations.
  • November '13 WTI crude opened today at $103.82 with the Brent/WTI spread softening to $5.05.

 

November 13 natural gas opened today at $3.54 and fell sharply at the release of EIA's report showing a bigger than expected gain in storage to $3.49. After that round of selloffs, the contract recovered to $3.54 1/2 and chopped lower from there. Support lies at $3.44 and $3.28 with downside potential to $3.12.Natgas10 3

Next resistance lies at $3.82, but with storage injections outrunning expectations, the contract is likely to move sideways to lower until colder temperatures excite demand for home heat.

Prices --

Henry Hub spot prices firmed from $3.52 to $3.61 during the Wed-Wed report week. Nymex prices firmed, initially, but lost a nickel on the contract switch-over to end the report week at $3.542.

Consumption --

Consumption decreased slightly during the report week, as natural gas consumption for electric power was little changed. Total consumption in the Lower 48 states decreased for the third straight week, to an average of 56.1 Bcf/d, 0.7% below last week, according to data from Bentek Energy. This occurred despite a 0.3% increase in average daily natural gas consumption for electric generation (power burn), which reached 21.0 Bcf/d this week. This increase totaled less than 0.1 Bcf/d and was more than outweighed by a combined 0.4 Bcf/d decrease in residential/commercial consumption (0.2 Bcf/d), industrial consumption (0.1 Bcf/d), and Mexican exports (0.1 Bcf/d).

Storage --

Working natural gas in storage increased to 3,487 Bcf as of Friday, September 27. The 101-Bcf gain in storage levels was significantly larger than both the 77-Bcf injection that occurred during the same week in 2012 and the 5-year average increase of 82 Bcf. Current inventories are 155 Bcf (4.3%) less than last year at this time, but 49 Bcf (1.4%) above the 5-year average of 3,438 Bcf, according to EIA.



Data and indicated text provided by EIA.

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