The U.S. Energy Information Administration (EIA) is set to release its Weekly Gas Storage Report on Thursday at 10:30am EST. Natural gas prices for December ’15 delivery were up over three cents early Thursday morning at $2.298 per mmBtu.
The median estimate of industry analysts is for an injection of 58 Bcf. If actually reported, the injection would be 33 Bcf less than the 2014 reported injection (91 Bcf) and 10 Bcf less than the five-year average (68 Bcf).
PointLogic Energy, a top-ranked analyst according to NatGasInvestor’s Analyst Accuracy Rankings, estimates that the injection will total 59 Bcf.
Natural gas prices were up Thursday morning primarily from a bullish GFS 06z run, which showed 256.9 gas-weighted demand days. The run included over 50 more gas-weighted days than its previous two runs.
“We’re up ahead of the report this morning,” said Steve Kingston, a reporter for NatGasInvestor.com. “But in my opinion, it is a classic bull trap of the GFS models.”
“We see this time and time again – all the demand is in the last hours of the model where it is extremely unreliable, inconsistent, and likely to change. That demand may eventually appear, but after such an increase in demand days over the last two runs, its likely an outlier in the short term.”
Natural gas storage levels currently sit at 3,877 Bcf. The record for natural gas storage levels is 3,929 Bcf which was set in 2012. With an injection of 58 Bcf (the median estimate), inventory levels would break the storage level record. Likewise, two more injections are expected after today’s reported injection.
“Short-term profits can be made by taking short positions on bull trap GFS model runs like today, but I’m still on the sidelines until I see real demand that consistently appears. We just aren’t there yet,” said Kingston.
To see the report at 10:30am EST, visit this link.
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