Welcome to the natural gas storage forecast edition of Natural Gas Daily!
We expect a +50 Bcf change in the storage report for the week ended Oct. 13. A storage report of +50 Bcf would be compared to +77 Bcf last year and +78 Bcf for the five-year average.
Our storage forecast is currently 3 Bcf higher than the ICE settlement report of +47 Bcf.
We revised lower our storage forecast from last Friday of +55 Bcf. Despite our lower revision, our estimate of +50 Bcf remains higher than the consensus estimate. We estimate the impact on supplies from Hurricane Nate from last week resulted in ~1.7 Bcf/d of production loss, but it's the power burn and other variables that could surprise to the upside this week.
Source: HFI Research
In our NGD yesterday titled, "Natural Gas Is Selling Off Again On Weather, But The Market Is Getting Ahead Of Itself." We said that the market was getting ahead of itself with the 2%+ sell-off to start the day because the bearish revision was only contained in October, and early Nov forecast remained cooler than normal.
Looking at the net change in storage today, the bullish revisions today far outweighed the negative revision yesterday. In turn, storage is almost certainly to remain below the 5-year average until EOS. Storage estimates remain tight versus the 5-year average.
We continue to believe winter contracts to be very cheap.
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