10-17-2014 Market Commentary with NG Chart

After ending the prior session near unchanged just 0.4 cent down at $3.796/MMBtu, November natural gas futures advanced overnight ahead of the Friday, Oct. 17, open, as traders looked beyond improving storage levels toward the possibility of polar vortex events well into winter that could prompt demand surges and sharp reductions in inventories that are expected to end the
injection season lower than the norm. At last glance, the front-month contract was trading near $3.769/MMBtu, down another 2.7 cents.

While a 94-Bcf injection to storage reported by the U.S. Energy Information Administration for the week ended Oct. 10 has improved inventories to 3,299 Bcf, lingering deficits of 344 Bcf to the year-ago level and 362 Bcf to the five-year average of 3,661 Bcf remain a concern for the market.

The reported addition bested SNL Energy’s final forecast consensus for a 90-Bcf addition to stocks, as well as the 79-Bcf year-ago injection and the 78-Bcf five-year-average addition, but signaled a slower rate of building compared to recent triple-digit gains.

“After record-shattering temperatures and high snow totals last winter in the Northeast, a similar theme will continue into the 2014-2015 season,”AccuWeather meteorologists said. Cold air will surge into the Northeast in late November, but the brunt of the season will hold off until January and February. The polar vortex, the culprit behind several days of below-zero temperatures
last year, could slip down into the region from time to time, delivering blasts of arctic air, according to the outlook.

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