The Platts pre-report analyst survey suggests U.S. EIA data will show an 107 to 112 Bcf addition to natural gas stocks for the latest reporting week Washington - June 17, 2009 The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 107 and 112 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended Friday, June 12, according to a Platts survey of analysts. An injection within expectations would be larger than both the 60-Bcf year-ago and 80-Bcf five-year-average injection. As a result, the year-over-year surplus -- which totaled 568 Bcf as of the week ended June 5 -- and the five-year-average surplus of 438 Bcf each is expected to expand. The broad range of analyst estimates for the week ended June 12 spanned from a build of 95 Bcf to an increase of 123 Bcf. EIA last week estimated a 106-Bcf injection for the week ended June 5. Martin King, vice president of institutional research at First Energy Capital said he is "optimistically" calling for a 99-Bcf injection because while weather in the Eastern U.S. has been cool, the South saw more summer-like temperatures and increased demand for natural gas due to higher air conditioning load from gas-fired power plants. "This may have helped to slow injections marginally, although we would not be surprised to see another triple digit injection in the very low 100s Bcf," he said. "What continues to work against the market the most is coming from the financial side of the equation, as the steep contango in the forward curve only encourages strong storage injections even in the face of a market that clearly is starting to wonder if storage will fill to nearly 100% by the end of the injection season." Contango is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery. Lisa Zembrodt, commodity analyst at Summit Energy Services, said she expects an injection of 105 Bcf, smaller than what EIA estimated for the week that ended June 5 because last week had a larger number of cooling-degree days, suggesting a stronger power load for air conditioning.
The U.S. Energy Information Administration (EIA) on Thursday is expected to report an addition of between 107 and 112 billion cubic feet (Bcf) to natural gas storage inventories for the week that ended Friday, June 12, according to a Platts survey of analysts.
An injection within expectations would be larger than both the 60-Bcf year-ago and 80-Bcf five-year-average injection. As a result, the year-over-year surplus -- which totaled 568 Bcf as of the week ended June 5 -- and the five-year-average surplus of 438 Bcf each is expected to expand.
The broad range of analyst estimates for the week ended June 12 spanned from a build of 95 Bcf to an increase of 123 Bcf. EIA last week estimated a 106-Bcf injection for the week ended June 5.
Martin King, vice president of institutional research at First Energy Capital said he is "optimistically" calling for a 99-Bcf injection because while weather in the Eastern U.S. has been cool, the South saw more summer-like temperatures and increased demand for natural gas due to higher air conditioning load from gas-fired power plants.
"This may have helped to slow injections marginally, although we would not be surprised to see another triple digit injection in the very low 100s Bcf," he said. "What continues to work against the market the most is coming from the financial side of the equation, as the steep contango in the forward curve only encourages strong storage injections even in the face of a market that clearly is starting to wonder if storage will fill to nearly 100% by the end of the injection season." Contango is the industry vernacular for the condition whereby prices for nearby delivery are lower than prices for future-month delivery.
Lisa Zembrodt, commodity analyst at Summit Energy Services, said she expects an injection of 105 Bcf, smaller than what EIA estimated for the week that ended June 5 because last week had a larger number of cooling-degree days, suggesting a stronger power load for air conditioning.