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James Hyerczyk
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Natural Gas

Natural gas futures are edging lower on Thursday as investors await the release of this week’s government storage report at 14:30 GMT.

The May futures contract came off the board on Wednesday without much fanfare but was able to post a modest gain as traders rolled into the June contract. Traders shrugged off a slight rise in production and potentially bearish weather forecasts.

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At 10:45 GMT, June natural gas futures are trading $2.951, down $0.009 or -0.30%.

According to Natural Gas Intelligence (NGI), liquefied natural gas (LNG) feed gas volumes continued to fluctuate on Thursday, but held near 11.5 Bcf for the third straight day.

Expectations for continued strength in the U.S. LNG exports have fueled momentum along the Nymex futures curve, keeping prices afloat even when weather demand has fallen short.

Short-Term Weather Outlook

According to NatGasWeather for April 29 to May 5, “Weather systems with showers and thunderstorms will impact a large stretch from Texas to the Ohio Valley today with slightly cool highs of 50s to 70s. Most of the rest of the U.S. will be comfortable with highs of 60s to 80s for light national demand. A slightly cooler weather system will track across the Great Lakes and Northeast Friday through Saturday with lows of 30s and 40s for a minor bump in national demand. However, most comfortable highs of 60s to 80s will rule most of the U.S. late this weekend into next week besides hotter 90s Southwest into Texas. Overall, swings between low and moderate demand the next 7-days.”

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US Energy Information Administration Weekly Storage Report

NGI is reporting ahead of the report, a Bloomberg survey of nine analysts produced injections estimates ranging from 6 Bcf to 19 Bcf, with a median build of 8 Bcf. Reuters polled 18 analysts, whose estimates ranged from an injection of 6 Bcf to 28 Bcf, with a median build of 9 Bcf. A Wall Street Journal poll also produced results within that range.

NGI projected inventories would grow by 13 Bcf.

These figures compare with last year’s injection of 70 Bcf and the five-year average build of 67 Bcf, according to the EIA.

Daily Forecast

Though early in the injection season, Lower 48 storage inventories also have struggled to make headroom when it comes to replenishing stocks, NGI wrote.

As on April 16, inventories stood at 1,883 Bcf, 251 Bcf below year-ago levels and only 12 Bcf above the five-year average, according to the EIA.

Market analysts expect the year/year deficit to expand even further when the EIA releases its next weekly storage report later today. Therefore a miss to the downside could spike prices higher.

For a look at all of today’s economic events, check out our economic calendar.

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