After trading down 2.6% (to $3.36) the front futures are changing hands at $3.446, down $0.004.
From the CME:
Nat Gas injection right at consensus
Today's Nat Gas injection report came in just about at the consensus forecast and within the range of expectations. The market was under a bit of selling pressure before the report was released and prices remain in negative territory since the injection report hit the media airwaves. There is not a lot of upside support at the moment even as the latest NOAA temperature forecast is calling for below normal temperatures for the eastern half of the US for both the six to ten day and eight to fourteen day forecasts. Although the 8 to 14 day projection shows a bit of moderation in the temperatures compared to the shorter term forecast.
It is that time of the year when the Nat Gas market is likely to be almost entirely driven by the day to day temperature forecasts as the winter heating season slowly evolves. The beginning of the heating season has been mixed with some colder temperatures early in October followed by a week or so of above normal temperatures with some colder weather now on the horizon. That all said the injection this week has increased over the earlier October injection reports and unless the temperatures get decidedly colder we could we could see the next few injections working their way closer to a more normal injection level.
From a technical perspective the expiring (expires October 29) November futures contract is now below the inverted head and shoulders breakout level and quickly approaching its next support level of around the $3.32-$3.33/mmbtu area. In addition the November/December contango is still widening suggesting that when the December contract becomes the spot month on October 30th it could be exposed to a bit of selling pressure unless the weather turns more bullish.
Thursday's EIA report was neutral to bullish from the perspective that the injection came in around the consensus forecast and bullish from the view that it came in well below last year but slightly above the five year average for the same week. The 67 Bcf injection was around the expectations and the market consensus calling for an injection of around 67 BCF. The net injection of 67 BCF was marginally below my model forecast (70 BCF) this week. The inventory surplus narrowed versus last year and versus the more normal five year average. The current inventory surplus was about unchanged at 251 BCF above the five year average or about 7% above.
This week's 67 BCF net injection is below last year's net injection of 95 BCF but above the injection level for the five year average of 65 BCF for the same week....MORE