NYMEX June gas rises to $2.838/MMBtu as EIA reports higher-than-expected injection

The NYMEX June natural gas futures contract climbed in US morning trading Thursday, as the US Energy Information Administration reported a higher-than-expected storage build for the week ended May 11.

As of 11:22 EDT (1522 GMT), the front-month contract was up 2.3 cents to $2.838/MMBtu, trading in a range of $2.780/MMBtu-$2.840/MMBtu.

The EIA announced an estimated 106 Bcf injection into national storage stocks Thursday, for the week ended May 11, just above the 104 Bcf build expected by a consensus of analysts surveyed by S&P Global Platts, and well above the 87 Bcf build averaged over the past five years during that time.

Currently, national gas stocks sit at an estimated 1.538 Tcf, down 34.8% from the year prior and a 24.6% deficit to the five-year average of 2.039 Tcf, according to EIA data.

Though stocks currently sit at a large deficit to the five-year average, near record level production could begin to produce above average injections.

Year to date, US dry gas production has averaged 77.2 Bcf/d, a 5.9 Bcf/d increase from the 71.3 Bcf/d averaged this time last year, based on S&P Global Platts Analytics data.

Total US demand is expected to fall 600 MMcf day on day to 69.5 Bcf, as nominal gains in Texas and the Northeast were offset by reduced demand in the Southeast and the Midcon Market.

According to Platts Analytics, much of the demand drop was due to decreased power burn in the Southeast.

Looking ahead, demand is expected to climb over the coming weeks, with Platts Analytics projecting total demand to average 70.5 Bcf/d over the next seven days and 71.2 Bcf/d over the next eight to 14 days.

The most recent six-to-10-day weather outlook from the National Weather Service calls for a likelihood of warmer-than-average temperatures for much of the country, which could give support to power demand.

This article provided by NewsEdge.