Natural Gas Intelligence
Northeast Points Lead Cash Higher; EIA Data Fails to Deter Bulls

Friday, August 31, 2012

Cash quotes overall on average were 7 cents higher Thursday, paced by double-digit, weather-driven gains at Northeast points. Eastern, Midcontinent and Rockies prices all gained as well.

The Energy Information Administration reported a build in natural gas inventories of an unexpectedly high 66 Bcf, momentarily energizing the bears, but at the closing bell it was bulls that came out energized as October had gained 6.3 cents to $2.748 and November had risen 5.2 cents to $2.919. October crude oil shed 87 cents to $94.62/bbl.

As injections move into the shoulder season, the likelihood of hefty power burns recedes, and analysts hinted that further downside is likely as the storage surplus remains stubbornly high. Thursday's Energy Information Administration inventory report was expected to show little to no reduction in the storage surplus, an abrupt change from many weeks of surplus declines.

Last year at this time, 60 Bcf was injected, and the five-year average stands at 62 Bcf for the period. This week, the estimates suggested an actual increase in the surplus. United-ICAP forecast a build of 68 Bcf, and a Dow Jones survey showed an average 62 Bcf gain. Bentek Energy predicted a 64 Bcf increase.

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