EIA Data Triggers Natural Gas Price Surge Amid Shrinking Surplus

Natural Gas Prices Surge as EIA Data Reveals Shrinking Surplus

The US Energy Information Administration (EIA) reported that working gas in storage stands at 3,351 bcf, with a 53 bcf injection that is 23 bcf below the five-year average and 24 bcf below last year's levels.

This modest build has contributed to a changing trajectory for natural gas prices. The market had previously been comfortable with a surplus, but six weeks of below-normal builds have taken away this comfort. Lower-48 dry gas production fell to an 11-week low of 109.8 bcf per day on Thursday, led by declines in Louisiana and Pennsylvania.

LNG feedgas flows to the nine major US export terminals averaged about 18 bcf per day in September, up from 17.2 bcf per day in August, due to increased demand from Europe and Asia ahead of winter. However, Cove Point maintenance has limited some flows.

The short covering that ran through four levels, $3.216, $3.264, $3.291, and $3.350, turned a modest bullish report into a 5.80% session gain for natural gas futures in November. The EIA number made the short side uncomfortable, leading to this surge.