Leading up to today's EIA Natural Gas Storage report, Natural-gas prices ticked higher Tuesday afternoon, rebounding from early morning losses that had taken intraday prices down to a two-week low.
Several brokers and analysts said there appeared to be no clear reason for the rebound, which happened nearly entirely in the last half hour before settlement. It is the second-straight session that prices tested their lowest point since mid-September and then bounced higher.
See a recap of previous weeks EIA storage reports here.
Natural-gas wholesale contracts for November delivery settled up 4.1 cents, or 1.4%, at $2.964 a million British thermal units on the New York Mercantile Exchange. Hurricane Matthew has been playing a role in trading this week, brokers have said.
The Gulf of Mexico accounts for a smaller share of U.S. gas production than it used to because of the boom in onshore shale drilling. But many traders still react to brewing storms near the Gulf as a threat to cause supply shortages. If it hits the East Coast it also could cause nuclear power plants to shut down, leading to more demand for gas-fired power. But it also could cause widespread power outages, which would reduce demand for every type of power. Small weekly additions to gas stockpiles also have been a frequent support for prices, analysts and brokers said.
Once at more than 50%, the surplus to last year has shrunk to just 2.6% and the surplus to the five-year average shrunk to just 6.5% as of Sept. 23, the U.S. Energy Information Administration said Thursday.
Recap of previous weeks EIA Natural Gas inventory Reports.
EIA Natural Gas Storage Report 10-6-16
Working gas in storage was 3,680 Bcf as of Friday, September 30, 2016, according to EIA estimates. This represents a net increase of 80 Bcf from the previous week. Stocks were 74 Bcf higher than last year at this time and 205 Bcf above the five-year average of 3,475 Bcf. At 3,680 Bcf, total working gas is above the five-year historical range.
Analysts estimated utilities added 70 billion cubic feet of gas into storage during the week ended September 30, the lowest build for that week in at least six years.
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