NEW YORK (Dow Jones)--Natural gas futures slipped Thursday as traders awaited government data expected to show a sizable build in U.S. gas inventories.
Natural gas for September delivery on the New York Mercantile Exchange was trading 4.8 cents lower, or 1.38%, at $3.431 a million British thermal units after opening floor trade less than a penny lower at $3.47/MMBtu.
"The market tried to rally yesterday alongside oil and equities, but it slipped back down and now we're pinned here ahead of the storage number," said Gene McGillian, an analyst with Tradition Energy in Stamford, Conn. "Unless we see a storage injection in the low 50s [billion cubic feet] or below, I think we're going to be rangebound."
The U.S. Energy Information Administration is expected to report that 64 billion cubic feet of gas were added to storage during week ended Aug. 7, according to the average prediction of 17 analysts and traders in a Dow Jones Newswires survey. The storage estimate surpasses last year's 51 bcf build in storage and the five-year average injection, which was 42 bcf.
"A further expansion in the surplus appears virtually inevitable in view of last year's 51 bcf hike," wrote Jim Ritterbusch, the president of Ritterbusch & Associates, a Galena, Ill. energy advisory firm, in a note to clients Thursday.
If the storage estimate is correct, inventories as of Aug. 7 will total 3.153 trillion cubic feet, 19.7% above the five-year average and 23.2% above last year's level.
High levels of production from onshore gas fields and Unusually moderate temperatures in the Northeast and Midwest over most of the summer have led to above-normal injections of gas into storage. Some analysts predict that U.S. gas storage facilities will reach full capacity before the winter heating season.
-By Christine Buurma, Dow Jones Newswires; 212-416-2143; christine.buurma@dowjones.com
