The EIA reported an injection figure of +17 Bcf, bringing the total storage number to 3.294 Tcf. This compares to the +49 Bcf build last year and the +49 Bcf build for the five-year average.
Can we call it for what it is? This is bullish. This applies to both bulls and bears. The lowest estimate we saw this week was +17 Bcf, while the consensus average was +26 Bcf, and we expected +20 Bcf. The report came in right at the lowest point and beat our forecast by 3 Bcf. Natural gas prices, on the other hand, don't care whether you think they're bullish or not because they have taken off already.
The "widow maker" is at it again.
The REX pipeline maintenance certainly had something to do with lower supplies, but this was materially lower than what people expected. Traders were also likely not positioned correctly going into this report. This report sets up well for next week. Next week's average forecast so far is for a +5 Bcf injection, while we see estimates as low as -2 Bcf. This would be a record setting July as it shattered four of the five-year minimum injection figures.
In order to penetrate the psychological $3/MMBtu barrier, August injection figures have to come way down from where they are currently at. Overall, this was a very bullish report. The +17 Bcf bodes well for storage as it further reduces the year-over-year surplus. Bulls can take this one home.
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