Thursday, May 30, 2013

Weekly EIA Natural Gas Storage Report

From the Energy Information Administration:

Weekly Natural Gas Storage Report

for week ending May 24, 2013.   |   Released: May 30, 2013 at 10:30 a.m.   |   Next Release: June 6, 2013

Working gas in underground storage, lower 48 states Summary text CSV JSN

Historical Comparisons
billion cubic feet (Bcf)

Year ago
5-Year average
Region 05/24/13 05/17/13 change
(Bcf) % change (Bcf) % change
East 910 857 53
1,319 -31.0 1,020 -10.8
West 380 368 12
408 -6.9 333 14.1
Producing 851 828 23
1,078 -21.1 876 -2.9
   Salt 243 239 4
260 -6.5 166 46.4
   Nonsalt 608 589 19
817 -25.6 710 -14.4
Total 2,141 2,053 88
2,805 -23.7 2,229 -3.9

From the CME, analysis by Cominick Chirichella:
Nat Gas inventories neutral to slightly bearish 
 Nat Gas futures are breaking down as the newly anointed spot July contract is now trading well below the key technical support level of $4.16/mmbtu. Since the EIA inventory report (see below for a more detailed discussion) was issued the market has traded slightly lower than where it was just prior to the report release. The EIA injection was within the market consensus, greater than last year but below the five year average. Overall I would categorize the report as neutral to slightly bearish.

At the moment the market is now back trading in the $3.90 to $4.16/mmbtu trading range that was in play from the end of April and through most of May. The market only spent 6 trading sessions in the higher trading range. The market is looking for fundamental support to move back to the higher trading range that it just declined out of. The way the market is trading I would expect another week of the speculative community reducing their net long positions as they have done for the last three weeks in a row. If the market settles below the $4.16/mmbtu level it would suggest that lower prices are likely on the horizon from a technical viewpoint.

From a fundamental perspective there is less nuclear outages compared to both last year and the five year average at the moment. Currently there are 13,603 MW of nuclear power sidelined versus 17,417 MW last year and 14,404 MW versus the five year average. As such the call on Nat Gas to supplement nuclear power generation is less than the historical data and suggestive that the upcoming inventory injections are likely to over perform.

In addition the latest NOAA temperature forecasts are less supportive than those issued earlier in the week. The area of above normal temperatures is now projected only over the east and west coasts with the rest of the country expecting normal temperature with a few small pockets of below normal temperatures in the mid-west through June 12th. Based on the latest forecast it does not appear that there is going to be a surge in Nat Gas cooling related demand anytime soon.

Thursday's EIA report was neutral versus the market consensus, bearish versus last year and slightly bullish compared to the five year average. The report showed a net injection that at the market expectations, greater than last year but slightly below the five year average net injection for the same period. The 88 BCF injection (about normal for this time of the year) was modestly equal to the Reuters market consensus calling for an injection of around 88 BCF. The build of 88 BCF was slightly below my model forecast (90 BCF injection) this week. The year over year inventory situation remains in a strong deficit position versus last year but has narrowed this week with the deficit versus the more normal five year average holding steady. The current inventory deficit came in at 88 BCF versus the normal five year average or about a negative 3.9 percent....MORE
Finally, from FinViz the 5-minute chart: