No Surprises in EIA Natural Gas Report; OPEC Crude Production Inches Higher

Earlier in the session, the EIA reported that domestic supplies of natural gas rose by 85 billion cubic feet for the week-ended May 3. Platts also said that the organization’s largest producer, Saudi Arabia, kept its production rate stable in April, at an average 9.82 million bpd. The Platts survey also showed that Iran saw an estimated 120,000 bpd drop in its production last month, to 2.57 million bpd.
James Hyerczyk
Natural Gas

Natural gas futures are trading lower, showing limited response to today’s U.S. Energy Information Administration (EIA) weekly storage report. The market is holding inside yesterday’s move, but lingering near the top of its one-week range. The chart pattern suggests investor indecision and impending volatility.

Earlier in the session, the EIA reported that domestic supplies of natural gas rose by 85 billion cubic feet for the week-ended May 3.

Traders were looking for a larger-than-average double-digit build.

At 17:41 GMT, June Natural gas is trading $2.593, down $0.017 or -0.85%.

A Bloomberg survey showed analysts were looking for a range of 79 Bcf to 108 Bcf, with a median 87 Bcf injection. International Exchange (ICE) EIA Financial Weekly Index futures settled Tuesday at a build of 86 Bcf. Natural Gas Intelligence’s (NGI) model predicted an 89 Bcf injection. Reuters predicted a build of 88 Bcf, down from last week’s 123 Bcf build.

Last year, the EIA recorded an 85 Bcf build for the period, and the five-year average is an injection of 72 Bcf.

Total stocks now stand at 1.547 trillion cubic feet, up 128 billion cubic feet from a year ago, but 303 billion below the 303 billion below the five-year average, the government said.

OPEC Releases Friendly Report

U.S. West Texas Intermediate and international-benchmark Brent crude oil are trading lower, but up from their intraday lows. Some of the strength at the mid-session was fueled by a strong recovery in the stock market after President Trump said a trade deal with China was still a possibility.

Also helping to underpin prices was a report that showed crude oil production in OPEC edged higher by a modest 30,000 barrels per day (bpd) to 30.26 million bpd last month. The S&P Global Platts survey showed the first increase after four months of steady declines.

The report also showed production in Iran and Angola declined, but increased in Nigeria, Iraq and Libya. The S&P Platts survey also revealed surprisingly that production in Venezuela stabilized last month.

Platts also said that the organization’s largest producer, Saudi Arabia, kept its production rate stable in April, at an average 9.82 million bpd.

The Platts survey also showed that Iran saw an estimated 120,000 bpd drop in its production last month, to 2.57 million bpd. The reason was that many importers of Iranian crude stopped buying it in anticipation of the May 1 expiration of U.S. sanction waivers that Washington granted to eight large importers.

At 17:55 GMT, June WTI crude oil is at $61.66, down $0.46 or -0.74% and July Brent crude oil is at $70.22, down $0.15 or -0.21%.

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