Denver — While the bulk of the market expected a second, consecutive, weekly withdrawal to US working gas in storage for the first week in November, a net injection was reported instead, while one more build is likely before the seasonal switch to draws due to low heating demand.
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US natural gas storage inventories increased by 8 Bcf to 3.927 Tcf for the week ended Nov. 13, Energy Information Administration data showed. The report was issued one day later than usual due to the Veteran's Day holiday.
The injection stood in contrast to an S&P Global Platts survey of analysts calling for a 4 Bcf withdrawal. Responses to the survey ranged for a draw of 12 Bcf to a 6 Bcf injection. The build was still less than the 12 Bcf build reported during the same week last year as well as the five-year average gain of 33 Bcf, according to EIA data.
The week saw temperatures in the middling zone between heating and cooling, resulting in a 4.3 Bcf/d decline in gas-fired power generation without significant residential and commercial demand gains in return, according to S&P Global Platts Analytics. LNG feedgas deliveries continued to climb in the wake of a busy hurricane season, gaining 1 Bcf/d.
Northeast production ramped up to record highs for the reference week, pushing up US supplies by 1.5 Bcf/d, and further weighing on prices at Henry Hub.
Storage volumes now stand 196 Bcf, or 5.3%, more than the year-ago level of 3.731 Tcf and 176 Bcf, or 4.7%, more than the five-year average of 3.751 Tcf.
The NYMEX Henry Hub December contract added 4.7 cents to $3.023/MMBtu in trading following the release of the weekly storage report at 10:30 am ET. The remaining winter strip, January through March, gained 4.6 cents to $3.086/MMBtu. However, the gains shifted to minor losses by the afternoon, with the prompt month dipping 3 cents from the day prior's settlement while the remaining winter strip shed 1 cent.
S&P Global Platts Analytics' supply and demand model currently forecasts a 19 Bcf injection for the week-ending Nov. 13. A sudden shift to warmer than normal temperatures loosened US fundamentals week over week, resulting in an 8 Bcf/d decline in residential and commercial demand. Dry gas production also declined by 1.8 Bcf/d, partially offsetting the bearishness of the demand losses.
The week-ending Nov. 20 looks to finally mark the switch to the winter withdrawal season, but early forecasts show below-average draws for the remainder of the month.