The NYMEX November natural gas futures contract fell Thursday despite the US Energy Information Administration announcing a lower-than-expected storage injection. The November contract settled at $2.89/MMBtu, down 2.9 cents from Wednesday’s close, the third straight day of losses. The EIA announced an estimated 64-Bcf storage build for the week ended October 20, lower than the 66 Bcf expected by a consensus of analysts surveyed by S&P Global Platts, and 11 Bcf below the 75-Bcf injection average over the past five years during that time. Total estimated stocks now sit at 3.71 Tcf, a 1.2% deficit to the five-year average. The below-average build continues a recent trend, with four of the past five storage injections coming in below the five-year average, according to EIA data. The bearish tone in the market could be due to the recent increase in dry gas production. Data from Platts Analytics’ Bentek Energy projected that US dry production will average 75.1 Bcf/d over the next 14 days, above the 73.7 Bcf/d month-to-date average.
Also countering the bullish build could be forecasts for a warm winter, with the National Weather Service’s most recent three-month outlook calling for above-average temperatures for much of the US through January. Above-average temperatures would take some demand pressure off of the market, as other factors, such as Mexican exports and LNG feedgas, have increased year on year. According to Platts Analytics, LNG feedgas has averaged 2.8 Bcf/d month to date, well above the 100 MMcf/d seen at this time in October 2016.