Thursday, May 3, 2012

U.S. natural gas futures up 5 percent after storage data

The futures are up a dime .102 at $2.355, making back much of yesterdday's loss.
From Reuters:
Front-month U.S. natural gas futures moved up sharply on Thursday after the government reported a weekly inventory build below market expectations.

The U.S. Energy Information Administration report showed total domestic gas inventories rose last week by 28 billion cubic feet to 2.576 trillion cubic feet. Traders and analysts polled by Reuters had expected a 31 bcf gain.

At 11:30 a.m. EDT (1530 GMT), front-month gas futures on the New York Mercantile Exchange were up 11.3 cents, or about 5 percent, at $2.366 per million British thermal units after climbing to an intraday high of $2.373 after the EIA report.

Just before the release of the data at 10:30 a.m., the front month was trading in the $2.33 area.
The nearby contract, which hit a 10-year low of $1.90 two weeks ago, peaked on Tuesday at $2.385, its highest since mid-March.

The inventory build was light relative to expectations and sharply trimmed the surplus to last year by 32 bcf to 840 bcf, or 48 percent. It also sliced 51 bcf from the excess to the five-year average, reducing the total to 857 bcf, or 50 percent.

"The build last week was slightly below survey expectations, a minor bullish surprise. We expect to see another below average storage injection for next week, and so the ongoing context is also supportive," Tim Evans, energy analyst at Citi Futures Perspective, said in a report.

While the inventory surplus to last year has dropped 5 percent from the highs in late March, traders said the market was still a long way from eliminating an oversupply that could pressure prices to new lows this year....MORE

From the EIA:

Working Gas in Underground Storage, Lower 48
Region Stocks in billion cubic feet (Bcf) Historical Comparisons
04/27/12 04/20/12 Change Year Ago (04/27/11) 5-Year (2007-2011) Average
Stocks (Bcf) % Change Stocks (Bcf) % Change

Working gas in storage was 2,576 Bcf as of Friday, April 27, 2012, according to EIA estimates. This represents a net increase of 28 Bcf from the previous week. Stocks were 840 Bcf higher than last year at this time and 857 Bcf above the 5-year average of 1,719 Bcf. In the East Region, stocks were 425 Bcf above the 5-year average following net injections of 20 Bcf. Stocks in the Producing Region were 325 Bcf above the 5-year average of 715 Bcf after a net withdrawal of 1 Bcf. Stocks in the West Region were 107 Bcf above the 5-year average after a net addition of 9 Bcf. At 2,576 Bcf, total working gas is above the 5-year historical range....