We saw another bullish EIA print, and the natural gas market finally held onto the gains following the print, with the September contract settling up a bit more than 2%.
Gains were by far most significant at the front of the strip.
In fact, the September contract caught such a bit that it approached recent highs from the last few months in the U/V September/October contract spread.
Much of this is thanks to the bullish EIA print, with the EIA announcing that 35 bcf of gas was injected into storage last week. This compared to our estimate of 40 bcf and a market consensus closer to the 42-45 bcf range.
Our Afternoon Update yesterday warned first that $2.75 support was likely to break (as it did overnight) but also that we would see a bullish EIA print that would offer weak support. The bullish miss to even our estimate certainly provided more than weak support, though we were correct in identifying the direction of the risk.
Immediately after the print, in our EIA Rapid Release, we provided an updated end of injection season storage estimate and looked at the relative balance of this week's print compared to the 5-year average and year-ago levels. We also put the print in historical perspective and outlined exactly how we expected price to react to the number into the weekend. We showed that the print was weakly looser than the prior week, but still quite tight compared to the last 10 weeks.
Meanwhile, medium-term forecasts in the 6-10 Day time period have continued to exhibit significant forecast volatility, which was a key focus in our Morning and Afternoon Updates today. Our Afternoon Update also looked at recent movements along the natural gas strip and our updated daily weather-adjusted demand and supply figures to provide our view on price risk headed into the weekend.
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