• Tony Zelinski

EIA Natural Gas Storage Report 11-03-16


Leading up to today's EIA Natural Gas Storage report, Natural gas prices fell sharply once again in yesterday’s trading, with the wholesale contract for December delivery on the New York Mercantile Exchange ending the session down 3.8% at $2.792, the third consecutive lower close.

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The wholesale contract is now down 21% from the October closing high. Warmer than average weather conditions in key regions of the U.S., the driver of the October decline, continue to weigh on prices. The wholesale contract has extended its decline despite the presence of an extreme oversold condition, a sign of underlying weakness.

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While these factors support the case for still lower prices, the wholesale contract is susceptible to a quick snap-back rally, given the oversold market condition. This is particularly the case heading into tomorrow’s session, given the close proximity of key support at the May corrective bottom at $2.760. And, volatility has the potential to be a factor today, as the latest inventory report will be released.

See a recap of previous weeks EIA storage reports here.

EIA Natural Gas Storage Report 11-03-16

Working gas in storage was 3,963 Bcf as of Friday, October 28, 2016, according to EIA estimates. This represents a net increase of 54 Bcf from the previous week. Stocks were 48 Bcf higher than last year at this time and 173 Bcf above the five-year average of 3,790 Bcf. At 3,963 Bcf, total working gas is above the five-year historical range.

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Analysts were looking for a build of 56 Bcf from this morning’s inventory report. As of 10:32 ET, natural gas futures were trading higher by 0.3% to $2.800.

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Recap of previous weeks EIA Natural Gas inventory Reports.

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