Happy Storage Day
The EIA storage report for the week ending April 18th showed a net injection of +88bcf as compared to an average estimate of +64 Bcf. The highest estimate I saw was +81 so this is a solid beat. Utilities are not waiting to shove gas into storage. The average injection for this week is +58 Bcf so we are making good progress towards next winter. We are currently only 2.2% below the 5 year average amount of gas in storage, which is a huge improvement. March was a net injection for the month and April has been ahead of the curve. Let’s see if this continues.
NYMEX futures were down before the report so fair to assume that this was not entirely unexpected. However, we have been down all month, so traders are following that trend.
And what a trend it has been for the past 2 months. Since the May NYMEX contract hit a high of $4.90 US/mm on Sunday March 9th overnight when the futures opened, we are down 6 of the last 7 weeks to a close today of $2.87, or a 41% drop. A lot of longs are exiting this market and when they are done, we will find some support. I don’t know where or when this will happen, but this market is due for a retracement, so don’t get greedy.