NYMEX August natural gas futures slid on its debut as the front-month contract Thursday, settling at $2.94/MMBtu, down 4.1 cents, despite a low 66-Bcf build to storage stocks that the Energy Information Administration posted earlier Thursday.
The front-month contract was trading in the range of $2.93/MMBtu-$3.021/MMBtu so far in the session. The same pattern was seen for several other contracts. September was down 3.2 cents, closing at $2.919/MMBtu, while the October contract was down 2.8 cents to settle at $2.927/MMBtu.
The 66-Bcf build for the week ending June 22 trailed the five-year average injection of 72 Bcf for the same period and was below the 74-Bcf build forecast by a consensus of analysts surveyed by S&P Global Platts Analytics.
The net increase in storage put current national stocks at 2.074 Tcf, nearly 26% below the 2.809 Tcf level during the same time last year and at a deficit of 19.5% to the five-year average of 2.575 Tcf.
The market moved south and shed value due to "competing factors," said Phil Flynn, senior market analyst Price Futures Group.
"Record production and upward revision of last week's [storage] number" kept the market from reacting to the bullishness of the report, he said.
The EIA revised the storage report for the week ended June 15 from 91 Bcf to 95 Bcf, which offset the bullishness of Thursday's report. The reported revision Thursday caused inventory for the same week to change from 2.004 Tcf to 2.008 Tcf.
"The low build might be due to the continued hot weather across the country," said Kyle Cooper, analyst at IAF Advisors.
Strong power burn in the Northeast and South Central regions slowed down the pace of storage build, despite gains in production. The last three injections in June had exceeded market expectations, marginally shrinking the deficit accrued over the winter. The current injection did nothing to support stock-rebuilding efforts.
The National Weather Service calls for a likelihood of above-average temperatures for much of the country over the next six to 10 days, stimulating strong demand.
