AF: NYMEX natgas rebounds early despite bearish EIAs
* Big weekly stock build initially pressures prices
* Warm late-week weather helps support cash and futures
* Storage still stands at record highs for this time
* Stock surplus to year-ago shrinks, to 5-yr average grows
(Releads, adds inventory data)
NEW YORK, June 10 (Reuters) - Front-month U.S. natural gas
futures sold off, then rebounded early Thursday despite a
government report showing a larger-than-expected weekly
inventory build.
The U.S. Energy Information Administration report showed
total domestic gas inventories rose last week by 99 billion
cubic feet to 2.456 trillion cubic feet, a record high for this
time of year and a level not normally reached until early July.
The build, which was above market expectations of 93 bcf,
narrowed the storage surplus to year-ago but slightly widened
the huge surplus to the five-year average. (Graphic
link.reuters.com/hut82k)
The increase in supply further eased any concerns about
rebuilding stocks for next winter even if the summer turns hot
or Gulf Coast storms disrupt gas supplies.
Front-month gas NGc1 was trading at about $4.71 per
million British thermal units, up 3 cents, just prior to
release of the weekly data at 10:30 a.m. EDT (1430 GMT), then
slid sharply to $4.628 right after the report before rebounding
to the $4.79 area at about 10:50 a.m.
Despite the heat last week that kicked up cooling demand,
traders noted commercial demand typically slows around the U.S.
Memorial Day holiday last week, when some businesses and
schools close, allowing higher injections.
The EIA report showed the storage surplus to year-ago fell
10 bcf to 28 bcf, or 1 percent, while the excess to the
five-year average gained 4 bcf to 310 bcf, a comfortable,
14-percent cushion.
If weekly builds through October match the five-year
average pace, inventories will begin next heating season with a
comfortable 3.793 tcf in the ground, below last November's
record high of 3.837 tcf, but nearly 9 percent above average.
Early injection estimates for next week's EIA report range
from 62 bcf to 95 bcf, versus a 113-bcf build for the same week
last year and a five-year average gain of 84 bcf.
(Reporting by Joe Silha; Editing by Lisa Shumaker)
