The October natural gas contract took over as prompt today, moving up a bit more than a cent on hotter forecasts even as EIA data missed slightly to the bearish side. 

Prices initially shot lower when the EIA announced that 70 bcf of gas was injected into storage last week, compared to our estimate of 66 bcf and a market consensus that was closer to 63-65 bcf. 

In our Note of the Day for clients this past Friday we noted that loosening power burns were likely to result in a larger storage injection to be announced today. 

In our Weekly Update on Monday we again noted that there were upside risks around this print, but noted that a large storage deficit would still prove supportive this week. 

Then this morning we highlighted that, while we saw room for a morning rally, “[w]e additionally see some bearish risks with this morning’s EIA print and are looking for a number around 66 bcf that would seem to limit upside as well.” Though the print was a touch larger than expected, clients were prepared for the upside risk which had been our focus all week. Still, that was quickly shaken off thanks to GWDD additions we had also noted this morning. 

In fact, last week’s EIA print missed 4 bcf tight to our estimate, whereas this week missed 4 bcf loose, an indication that on a 2-week basis we have a strong reading of a market that continues to see weekly EIA noise. This has helped us accurately predict forward price risk through the last couple of weeks and especially over the last week, where have seen a weak strip pull back contracts at the front. 

Attention now turns to how currently hot forecasts are likely to change over the weekend, and undoubtedly traders will continue to digest this most recent EIA print tomorrow. We’ll again be releasing our daily weather-adjusted power burn and demand figures for subscribers tomorrow, alerting them how we see risk skewed into next week’s EIA print as we look at both daily and weekly weather-adjusted balances.