Nat Gas Plunges On Larger Than Expected Stockpiling In Inventories
Nat gas is in freefall after the EIA reported a much larger than expected build up in natgas inventories: the Energy Information Administration reported an increase by 78 billion cubic feet for the week ended July 2. Expectations were for a 70 bcf increase, while the last week reading was at 60 bcf. The result is a freefall in the price of nattie which has now plunged 5% for the day, and is back to early June levels. Today's move is sure to result in major adverse P&L at some of the key players in the space.
From the ECF:
Working gas in storage was 2,762 Bcf as of Friday, July 2, 2010,
according to EIA estimates. This represents a net increase of 78 Bcf
from the previous week.
Stocks were 23 Bcf less than last year at this time and 285 Bcf above
the 5-year average of 2,477 Bcf. In the East Region, stocks were 64 Bcf
the 5-year average following net injections of 48 Bcf. Stocks in the
Producing Region were 128 Bcf above
the 5-year average of 834 Bcf after
a net injection of 19 Bcf. Stocks in the West Region
were 93 Bcf above the 5-year average after a net addition of 11 Bcf. At
total working gas is within the 5-year historical range.