Inventories rose far more than expected yet very bullish support afer the 1030AM EIA report! I try to explain my children whats right and wrong but this time I lost it.. Can anyone explain this weird reaction on the EIA Natural gas inventories to me?
The production cuts are slowly whittling down the percentage above last year's level at the time. Also, there is a cold front that has some areas 20 to 30 degrees below normal, and this will impact the next report or two.
Many traders were out there to buy any dip; thats for sure! Will probably remain a bullish story for some time..
I try to remember what happened a week ago. I think the whisper numbers (PIRA and Bentek) were much higher. But the stupid wall street analysts were all wrong. The real EIA # was higher than wall street survey, but lower than the whisper number. So the strong upward price reaction. A little the same last week. PIRA had 55 BCF and Bentek had 59 BCF. Actual was 58 BCF, higher than the 53 wall street (stupid) number. Price initally dipped, then recovered and ended the day up. Things never make sense with NG. With the current cold weather, the injection will slow down quite a bit. Next week's EIA is about 29 BCF. So we won't reach the system capacity. No storage overflow. Then the withdraw season starts. If the current cold winter forecast holds, it will burn off 100-200 BCF excess easily. Who knows how fast the economy will recover next year. If CL goes to $80-$85 by the of the year, look for NG to add another $. We won't have the storage cap issue for another year.
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