Natural Gas Prices Pull Back After EIA Report
- Working gas in storage increased by 118 Bcf from the previous week, compared to analyst estimates of +113 Bcf.
- Natural gas stocks are higher than the five-year average for this time of the year.
- Natural gas prices remain range-bound as bulls do not have enough catalysts to push natural gas out of the current trading range.
On June 8, EIA released Weekly Natural Gas Storage Report, which indicated that working gas in storage increased by 104 Bcf from the previous week.
The report noted that “reclassifications from working gas to base gas resulted in decreased working gas stocks of 14 Bcf in the Nonsalt South Central region”, so the implied increase in working gas in storage was 118 Bcf.
Analysts expected that working gas in storage would grow by 113 Bcf, so the report exceeded analyst estimates. At current levels, stocks are 353 Bcf above the five-year average for this time of the year.
The current demand for natural gas remains low, so it’s not surprising to see that stocks are building at a robust pace. Bulls hope that demand would grow after June 15 due to warmer weather, but it remains to be seen whether such hopes would provide sufficient support to natural gas prices.
Natural gas prices moved lower after the release of the EIA report. The report was bearish, so bulls will have to rely on positive changes in weather forecasts to push prices higher. From a big picture point of view, natural gas futures remain stuck in the $2.20 – $2.35 range.
For a look at all of today’s economic events, check out our economic calendar.