BWS Blog


Breaking Down Today's In-Line EIA Report

Thursday, July 25, 2019 at 4:58PM


Natural gas prices trade in a fairly tight range of just under 4 cents today, despite being an "EIA report" day. The August contract settled just over 2 cents higher on the day.

natural gas commodity weather

One reason for the lack of significant movement? Today's EIA report, despite the uncertainty around how much influence Hurricane Barry would have on the number, wound up almost dead on with the consensus market estimate, with last week's build being 36 bcf.

natural gas commodity weather

The draw in the salts was very impressive, but the overall report, while a lower build than the 5-year average, was reflective of supply demand balance that are still too loose to support a move higher, as seen when looking at the trend line of this same gas week in recent years.

natural gas commodity weather

In fact, despite prices still being at historically low levels and a July that turned out to be a top-tier hot month in terms of national demand, end-of-season storage forecast have still not made a move lower, as the supply / demand balance has not tightened like what typically is observed with prices this low. As the saying goes, "low prices is the cure for low prices", and at some point that will again be true, but we have not reached that point as of this writing.

Recent weather trends are introducing another potential cooler push in the medium range, placing some "blues" back in our 11-15 day forecast today.

natural gas commodity weather

That will not help the bullish case as long as cooler trends persist. Having said all of that, it is just the 25th of July, meaning there is plenty of time between now and the end of injection season, and as we know here in the world of natural gas, things can change quickly. Our research is geared toward anticipating key changes and highlighting the risk for market moves before they occur with our unique blend of weather and natural gas fundamentals. Sign up for a 10-day free trial here to take a closer look at all of the products we have to offer.