Natural Gas: Storage Crystal-Balling Improves After Misfires - A ‘Good Omen’?
It’s quite fascinating the difference a week can make for the storage forecasters in natural gas. There’s no certainty yet if a new trend is in place for those who had been off-target week after week — sometimes horrendously — on the number of cubic feet that got injected into underground salt caverns in the United States.
But narrowing the variance between market estimates and the billion cubic feet reported each week by the Energy Information Administration, or EIA, is certainly a good thing — enough for some to think of it as a boon.
John Sodergreen, the author of a weekly trade journal on natural gas called “The Desk”, opined on this in his latest note:
“Last week’s 32-bcf build, while unseasonably small [also lower than the five-year average build of 51 bcf and 29 bcf lower than last year’s 61-bcf injection] was nonetheless a good omen for analysts.”
“Given the number of surprises out of EIA across the past few weeks, last week’s reported number was very close to market consensus.”
While the most far-off estimate during the week ended Aug. 25 called for a build of 25 bcf, the average and closest was 31 bcf — just one digit below what the EIA reported.
Most of the misses for that particular week were again in the south-central region, home to inventory and flow data that is about as transparent as Russian crude exports data (pun intended).
The EIA reported a whopping 22-bcf pull for that region, with the survey average coming in at a mere 15 bcf.
For storage change during the week to Sept. 1, given the heat in that area, the quirky wind stats plus the extended holiday weekend of Sept. 4, and less blistering heat in border regions, the south-central pull should be less than half what we saw the previous week.
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