Happy Storage Day
Spring is starting with some good news! This morning, the EIA reported that for the week ending March 14th, there was a net INJECTION of gas into storage. That’s right, we have made it through winter and we are beginning injection season.
Expectations were for a small withdrawal, but with a wide range of estimates (-24 Bcf to +10 Bcf). The EIA reported an injection of +9 Bcf, right at the top of the range. I will call this one a miss to the upside, and the market agreed!
The NYMEX April front month contract, after trading up to $4.26 US/mm yesterday, traded down to close at $3.98 this afternoon. Remember that this $4.00 level has been support for the last week and a close beneath it tomorrow would be a good sign of things to come.
Of course I have to put in my disclaimer that this is Natural Gas and anything could (and often does) happen, but this sell off makes sense. The weather is getting warmer, most if not all the snow is melted, demand is low enough that we can inject gas into storage, so I think a gradual sell off is in order.
[WFG]