LONDON (Commodity Online): Gas prices shaved off a few cents while the EIA-914 report showed a moderate m/m production growth for July. The prompt month contract came off 5 cents and finished at $3.75/MMBtu, as the weekly storage report churned out a slightly higher-than-expected injection for the week in reference.
Calendar 2012 inched lower by 3 cents, to $4.28. The weather outlook on the day is little changed for the most part, although the Southeast looks it could become slightly cooler than previously forecast in the next five days, potentially shaving off some CDDs in the mid-Atlantic.
The EIA weekly storage report showed that the lower-48 states injected 111 Bcf into storage for the week in reference, roughly 11 Bcf higher than consensus.
Stocks added 67Bcf in the East, 11 Bcf in the West, and 33 Bcf in the Producing region. This puts inventory at 91 Bcf below that of last year at this time and 5 Bcf above the five-year average.
On the other hand, the EIA-914 report released the July production data, which showed that production grew by a moderate 86 MMcf/d, in line with our expectations that production growth should continue decelerating.
Regionally, production continues to slow in the traditional basins in the Gulf and Texas, while other states (mostly Pennsylvania) registered large m/m gains. In our view, most of the slowdown in production growth could be attributed to a swelling number of drilled but uncompleted wells.
Cash prices dropped across the board, with Henry down by 11 cents, to $3.77; SoCalBorder edging lower by 5 cents, to $3.97; and Transco-Z6 NY closing at $3.96, down by 17 cents.
