“This was way below the five-year average,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc., told Bloomberg. “It wasn’t even close. After this number you can paint that picture where you can go into a deficit situation by November.”
Phil Flynn, senior market analyst at Price Futures Group, pointed out that some traders are speculating that next week’s report could show an even smaller inventory due to the oppressive summer heat.
Northeast and the mid-Atlantic are suffering a heat wave this week, with high temperatures in Washington up to 93 degrees Fahrenheit, the eighth consecutive day of 90 degree weather, according to AccuWeather Inc. MDA Weather Services forecasts above normal readings on the East Coast over the next five days will spread through the central U.S. on August 2 through August 6.
The rising temperatures have caused an uptick in electricity generation for cooling to combat the summer heat. According to PointLogic Energy data, power generators burned about 36.2 bcf a day of gas so far this month, up 9.6% year-over-year.
Nevertheless, total U.S. natural gas storage was at 3.294 trillion cubic feet, or 13.2% higher for the same period last year and 15.9% above the five-year average for this time of the year.
United States Natural Gas Fund