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June NYMEX gas eases slightly to $2.808/MMBtu ahead of EIA storage report

London (Platts)--17 May 2018 747 am EDT/1147 GMT


NYMEX June natural gas futures eased slightly in overnight US trading ahead of Thursday's open and the midmorning release of storage data which is poised to become the next major catalyst for price movement. Having shed 2.1 cents in the previous session, the contract was 0.7 cent lower at $2.808/MMBtu at 7:15 am ET (1115 GMT).

Warmer weather which generated early cooling load but also encouraged a sharp decline in heating demand is expected to have driven the season's first triple-digit storage injection when the US Energy Information Administration releases its next inventory report which will cover the week ended May 11.

During the week ended May 9, much of which will be reflected in the upcoming storage data, warmer weather triggered a 14% increase in power burn week on week alongside a 37% drop in residential/commercial-sector demand, according to the EIA's latest Natural Gas Weekly Update. Total US gas consumption was down 4% on the week.

Estimates for the forthcoming storage data call for a build to stocks of anywhere from 99 Bcf to 110 Bcf, with consensus formed at a 104 Bcf addition. That would compare to a 64 Bcf prior-year injection and an 87 Bcf five-year average build.

Additional warmer weather is on deck for the bulk of the country in the weeks ahead, as the National Weather Service continues to see above-average temperatures covering nearly the entire country through both the six-to-10-day and eight-to-14-day periods.

Analysts see diverging weather-related demand patterns associated with warmer conditions driving a degree of uncertainty in the market, however.

"We continue to look for the possibility of a two-sided trade because projected warm weather suggests low heating demand, but the building of cooling demand, could have a mixed impact on the rate of subsequent storage injections," FX Empire analyst James Hyerczyk said.

-Staff reports, newsdesk@spglobal.com

--Edited by Maurice Geller, maurice.geller@spglobal.com




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