Storage day is upon us, and natural gas markets felt its wrath. The EIA’s announcement of an injection volume of 87 bcf compared to industry estimates of 80 bcf proved once again to support the bears. The NYMEX front month slid $0.11 USD/MMBtu or 3% to settle at $3.32 USD/MMBtu. The January and February contracts only dipped $0.01 USD/MMBtu.

Lower 48 storage volume now stands at 3,808 bcf, 87 bcf (0.9%) higher than last year and 164 bcf (4.5%) higher than the 5-year average. The larger-than-expected growth can be attributed to the mild weather experienced across the US over the first half of October.

In cash markets, Dawn prices have been rallying due to increased demand from cooler weather and reduced flows from US pipelines. Unlike Alberta and US storage, which are heavier than last year, Dawn storage volume is still slightly below (-2.4%) last year’s storage. As the storage facility aims to reach its target threshold of over 95% full, we could see lasting days of elevated cash prices as the utility buys up more gas. (PB)