Afterending the prior session 6.5 cents lower at $2.076/MMBtu, June natural gasfutures clawed up overnight ahead of the Friday, May 6, open, in short-coveringleading up to the weekend. But amid an overriding fundamental weakness, asbuilding inventories and weather forecasts that spell limited demand continueto plague the market, the contract moved back to near unchanged, trading lastdown 0.2 cent at $2.074/MMBtu.
Naturalgas inventories saw the third straight week of net injections in the last weekof April, as the U.S. Energy Information Administration outlined a net68-Bcf build tostocks for the week to April 29.
Thereported storage build was within the range of coming into the day that hadcalled for an addition to stocks from 56 Bcf to 75 Bcf, but was above theconsensus formed at a 66-Bcf injection. It was larger than the 64-Bcffive-year-average build but smaller than the 77-Bcf injection seen in the correspondingweek in 2015.
Althoughthe week's data signaled a slowdown in the pace of storage-building as it cameon the heels of a 73-Bcfbuild a week earlier, it still improved inventories to 2,625 Bcf,or 861 Bcf above the year-ago level and 836 Bcf above the five-year average of1,789 Bcf.
Withweather forecasts suggesting predominantly mild weather through mid-May, therate of weekly injections looks to accelerate in the coming weeks absent anysignificant calls on natural gas for either heating or cooling.
Theupdated National Weather Service outlook for the six- to 10-day period showsabove-average temperatures stretching from the bulk of the country's easternthird into the lower tier of the Gulf Coast and a majority of the West, asbelow-average temperatures encompass a section of the west-central U.S. andaverage temperatures linger over parts of the Rockies, Midwest and Gulf Coast.
Theeight- to 14-day forecast calls for above-average temperatures over the bulk ofthe country, spanning the Eastern Seaboard, nearly all of the southern U.S. andmost of the West. Below-average temperatures are indicated only for much of theMidwest, while average temperatures are reflected for portions of the Rockiesand the remainder of the Midwest.
Lacklusterdemand should allow for natural gas to flow more heavily into undergroundstorage facilities, thereby augmenting already robust supplies.
Althougha slow start to the current injection season has put the 2016 refill seasonwell behind the pace of previous injection seasons, working gas stocks remainnear record-highs for this time of year, the EIA said.
Thusfar in the 2016 injection season, the cumulative net storage build is at 145Bcf, versus the five-year average of 183 Bcf and the year-ago tally of 292 Bcf.Yet, working gas stocks as of April 29 were 40 Bcf above the five-year maximumfor this time of year, which occurred in 2012.
Incash trading, abating weather-driven demand support drove price activity forday-ahead natural gas delivery lower in much of the country Thursday.
Acrossthe key hubs, the charge to the downside was led by Transco Zone 6 NY spot gasprices that tumbled by almost 17 cents on average to an index at $1.826/MMBtu.Chicago next-day gas price action followed with a near 8-cent decline intransactions averaging at $2.012/MMBtu, as did PG&E Gate day-ahead gaspricing that unraveled roughly 2 cents on the session to average at$2.109/MMBtu. Bucking the downtrend, however, was benchmark Henry Hub cash gasprice activity that advanced by 2 cents on the day to an index at $2.050/MMBtu.
On aregional basis, Northeast next-day gas pricing shed 9 cents in trading toaverage at $1.983/MMBtu, as Midwest cash gas price action deflated by near 7cents to an index at $1.950/MMBtu. West Coast spot gas price activity slumpedby 4 cents in deals averaging at $1.814/MMBtu, as Gulf Coast day-ahead gasprices faltered by about 6 cents on average to an index at $1.874/MMBtu.
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