Energy Insider Blog

Natural Gas futures slipped this morning as traders weighed yesterday’s injection, which boosted inventories to 3.908TCF, which is an all time record. For two consecutive weeks EIA has reported injections that have been higher than the 5-year average, bucking the underperforming trend from the summer. Moreover, it is likely that there will be additional injections this year in light of moderating temperatures in the 6-14 day horizon. Nevertheless, we have seen some mixed weather forecasts from different outfits, so front month prices will be quite volatile during the next couple of weeks.

Natural Gas futures edged higher in the morning as power has been restored for several million households in the northeast; however, the number of  households without power is still high (6.6million). Another fact that is currently limiting the downside is the elevated number of nuclear plant outages. Additional nuclear capacity was lost due to Sandy. Currently, the number of outages is ~36% higher than the five year average for this time of the year.

The November 2012 contract settled at $3.471/MMBtu (up ~$.07/MMBtu).

After very choppy trading yesterday, Natural Gas futures continued the downward trend from the previous 4 trading sessions. Yesterday’s build bucked the trend of underperforming injections, as the 67Bcf was slightly higher than the 5-year average 65Bcf. Next week’s report has the potential of showing an even higher injection due to the mild temperatures during this week.