Hi Ceejay,
This just came out and my observation is:
Price dropped further right after.
See next to last paragraph:
My understanding is that when Producing Region is at a surplus, the gas moves East and tends to further drive prices down.

I have also read that the Appalachian area has been producing more than expected and this higher production is not observable until the EIA puts the "dipstick" in the storage sites each week !!!

You can see how this fits your thinking.
Right now, I'm not very optimistic. This drop may just be the prelude to what will come tomorrow morning !!!!

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US EIA to estimate a 58-62 Bcf natural gas injection: analysts

Washington (Platts)--20Jul2011/939 am EDT/1339 GMT

The US Energy Information Administration is expected to estimate an injection to US natural gas storage stocks of between 58 Bcf and 62 Bcf for the week that ended Friday, according to a consensus of industry analysts.

A build within those expectations would be above the 55-Bcf injection of a year ago and below the five-year-average addition of 67 Bcf, according to EIA data.

As a result, the 218-Bcf year-on-year deficit should shrink and the 52-Bcf deficit to the five-year average should grow.

The wider range of analyst estimates shows injections of 51 Bcf to 72 Bcf for the week that ended Friday. EIA last Thursday reported an 84-Bcf build for the week that ended July 8.

Gelber & Associates analyst Jonathan Arfa said the weather last week was hot, like the week before, but "without the benefit of the July Fourth weekend to mitigate cooling demand."

"Three of the past four weeks' injections have been a good deal above most analysts' expectations, but don't expect a third -- people have woken up to the reality of high supply," Arfa said.

According to an analysis by Barclays Capital analysts Biliana Pehlivanova and Michael Zenker, the storage deficit is largely in the US consuming regions, while the producing region continues to see a surplus.

"This could set up a basis disconnect between the Gulf and demand centers as the winter begins, breathing life into basis markets," the analysts said. --Brian Scheid, brian_scheid@platts.com

Lee