Natural gas prices cratered in today's trade as the spot July 15 contract fell by nearly 5% following release of the weekly EIA storage report.
The spot market is now down just over 14% in just 6 trading days as weather forecasts moderate and long position holders run for the exit.
Today's 112 Bcf storage build came 13 Bcf above the average analysts' guesstimate for 99 Bcf injection which led to heavy selling. Key technical support was broken on the sell off possibly leading to new price lows in upcoming trade.
Storage builds over the first 8 weeks of the injection season have exceeded the 5-year average each week with storage injections totaling 640 Bcf, 172 Bcf or 37% above the 5-year average. The deficit of gas currently in storage relative to the 5-year average during this time frame has narrowed from 6.5% to just .7%.
Weather forecasts have also moderated suggesting another cooler than normal summer lowering weather-related demand for natural gas.
While there could be another summer weather rally, the market appears ready to set new lows over upcoming weeks of trade.
Current weakness is an excellent opportunity to add to longer dated coverage particularly for 2016 and 2017 at historically low prices.
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