Bullish EIA Print Allows Partial Natural Gas Recovery

Natural gas prices shot higher today following hotter long-range weather model guidance and a more supportive EIA print than expected. 

The EIA announced that last week we injected just 96 bcf of natural gas into storage, which was 6 bcf less than our 102 bcf expectation. 

Immediately following the report prices spiked and we passed along our EIA Rapid Release to clients, putting the print in context and explaining how we saw it as likely impacting natural gas prices moving through the rest of the day. In the report we show historically how the print has compared to past prints dating back to 2011, also comparing it specifically to the last 10 weeks to show how the market balance has changed recently. 

As we reported last week, we have recently rolled out new modeling for clients that weather-adjusts each weekly EIA print and forecasts the remainder of injection season, integrating our seasonal forecasts with the latest balance. Today we began including our 2-week adjusted balance to filter out noise in the weekly EIA print as well. Below is one piece of our modeled tightness included in the report. 

This is integrated with our custom weather forecasts as well, like those of this morning that continued to show significantly above average GWDDs through the next two weeks (and long-range hotter trends last night that appeared responsible for at least some of today's pre-EIA rally, as we had mentioned in our Morning Update). 

Prices reversed through the day, though, moving lower into the settle on afternoon model guidance that was not quite as impressive. We saw strong intraday signaling along the natural gas strip that the high for the day was likely in following the print, and our intraday Note of the Day included a piece on that. 

The Note also looked at Week 2, 3, and 4 forecast trends and recent weather-adjusted power burn balance to determine how risk in the natural gas market appeared skewed moving forward. Our Afternoon Update built on all this too, incorporating afternoon model guidance and spread movements today, in which we noticed significant narrowing of the N/V July/October contract spread. 

In this way we finally provide a truly holistic, integrated view of the natural gas market, combing our custom weather forecasts with weather-adjusted balance and demand data and spread movement.