Published: Apr 11, 2012
By Christian Berthelsen
Of DOW JONES NEWSWIRES
Analysts and traders expect government data scheduled for release
Thursday to show a slightly larger-than-average build in natural-gas
inventories.
The U.S. Energy Information Administration is expected to
report that 25.5 billion cubic feet of gas were added to storage during the week
ended April 6, according to the average prediction of 17 analysts and traders in
a Dow Jones Newswires survey.
The EIA is scheduled to release its storage
data Thursday at 10:30 a.m. EDT.
The survey's median result was a build
of 23 billion cubic feet, with a high estimate of a 40-bcf build and a low of a
19-bcf injection. The storage estimate is seven bcf higher than last year's
build in storage for the same week and 3.5 bcf higher than the 22-bcf five-year
average build for that week.
If the storage estimate is correct,
inventories as of April 6 will total 2.505 trillion cubic feet, 59.8% above the
five-year average and 56.6% above last year's level for the same
week.
Warmer-than-normal temperatures and robust production have weakened
supply-demand fundamentals and left stored inventories at record levels. Prices
have plummeted as a result, with natural-gas futures breaking below $2/MMBtu
Wednesday for the first time since January 2002 and cash-market prices at some
physical hubs also trading well below that. Market weakness is expected to
continue for the foreseeable future, as above-normal temperatures in the eastern
U.S. undercut late-season heating demand.
"Given the strong supply/weak
demand imbalance in place, [natural gas] is unable to encourage buyers back into
the market," research firm Summit Energy said in a note.
-By Christian
Berthelsen, Dow Jones Newswires; 212-416-2381; christian.berthelsen@dowjones.com
