The NYMEX October natural gas futures contract settled at $2.806/MMBtu Thursday, up 13 cents, as the market reacted to a smaller-than-expected weekly gas storage injection.
The US Energy Information Administration reported a weekly natural gas storage injection of 36 Bcf for the week ended September 2. The injection was below the expectations of analysts surveyed by S&P Global Platts, who were expecting a storage build of around 41 Bcf. Additionally, the weekly build was below the 78-Bcf prior-year injection as well as the 64-Bcf five-year average injection.
Looking deeper into storage injection season, Gene McGillian, senior analyst at Tradition Energy, said the market will be waiting to see if storage injections increase as temperatures drop to seasonal levels, and if at the end of the storage injection season there is a lot of gas in the ground that could weigh on the market.
"We continue to see room for a downward correction linked to the seasonal decline in power sector demand, but the constructive storage trend represents a challenge to that view," Citi Futures Tim Evans said in a market note Thursday morning.
The latest weekly EIA report marks the 18th consecutive injection that came in below both the prior year and five-year average.
Total US power demand is forecast to average around 30.3 Bcf/d over the next week, in line with the prior-week average, according to data from Platts Analytics' Bentek Energy. Looking ahead to the eight- to 14-day range, power demand is expected to ease, falling by 1.5 Bcf/d to average around 28.8 Bcf/d.
The October contract traded in a range between $2.679/MMBtu and $2.821/MMBtu.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
