EIA Reports Natural Gas Inventories Rise 91 Bcf, Prices Still Move Higher

The latest Energy Information Administration (EIA) natural gas storage data recorded a build of 91 Billion Cubic feet (Bcf) for the week ending September 8th. The increase was well above the build of 65 Bcf recorded last week and also significantly above consensus forecasts of an 82 Bcf increase.

This was the largest weekly increase in storage for 3 months and much higher than the equivalent build last year.

Stocks overall are 5.1% below the year-ago level from 6.2% last week and 1.3% above the five-year average.

There was a solid increase in stocks in both the East and Midwest for the week while stocks also increased significantly in the South Central region, the second successive weekly increase. Stocks were unchanged in the Pacific region and with a slight increase in the Mountain area.

Most attention in the energy complex will continue to focus on hurricane developments with mixed impacts from Harvey and Irma. There will be some further expectations of weak near-term demand.

Despite the larger than expected build, natural gas prices moved significantly higher after the data with an increase to above $3.08 per mBtu from below $3.05 ahead of the data.

Oil prices moved significantly higher on Thursday which helped underpin natural gas prices while the dollar maintained a firm tone.

The latest weather forecasts suggest that overall gas demand will increase during the week ahead with very hot conditions prevailing in the South. Expectations of firmer demand were important in helping to underpin prices.

Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.