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Reclassification tempers big natural gas storage injection

The U.S. Energy Information Administration reported a net 81-Bcf injection into natural gas inventories in the Lower 48 during the week ended May 26 that was above market expectations and mixed against historical averages.

The data included a reclassification of 4 Bcf from working gas to base gas in the Mountain region that resulted in an implied flow of 85 Bcf for the week under review.

The injection beat both the market consensus ahead of the report's release that called for a 75-Bcf build in stocks and the 80-Bcf injection reported for the same week in 2016, but missed the five-year average injection of 97 Bcf.

The build brought total U.S. working gas supply to 2,525 Bcf, or 370 Bcf below the year-ago level and 225 Bcf above the five-year average storage level of 2,300 Bcf.

July natural gas futures were trading on either side of unchanged in a range from $3.064/MMBtu to $3.128/MMBtu, and eyed 0.3 cent lower at $3.068/MMBtu just ahead of the 10:30 a.m. ET release of the data. Following the release, the contract tumbled to a $2.994/MMBtu low and was last seen 6.5 cents lower on the session at $3.006/MMBtu.

In the East, inventories were up 29 Bcf on the week at 419 Bcf, or 21.4% below the year-ago level. Storage levels in the Midwest were up 23 Bcf at 585 Bcf, or 10.1% below the year-ago level. In the Mountain region, storage levels were unchanged on the week at 166 Bcf, or 6.2% below the year-ago level, after the reclassification of 4 Bcf from working gas to base gas, while in the Pacific region, storage levels were up 8 Bcf at 258 Bcf, or 14.9% below the year-ago level. In the South Central region, where storage levels were up a net 21 Bcf on the week, stocks are at a deficit of 10.9% to a year earlier.

Working gas stocks in the South Central region totaled 1,097 Bcf, with 342 Bcf in salt cavern facilities and with 755 Bcf in nonsalt cavern facilities. Working gas stocks were up 4 Bcf in salt cavern facilities and up 17 Bcf in nonsalt cavern facilities since the previous week.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities Pages.