Daily Fundamental Natural Gas Price Forecasts – May Need To Pull Back To $ 4.021
Natural gas prices are struggling to gain a foothold shortly after Friday’s regular session opens, as traders continue to ignore yesterday’s potentially bullish government storage report and weather forecast calling for a return of warm temperatures from mid-month.
At 12:37 GMT, September natural gas futures are trading at $ 4.123, down $ 0.017 or -0.41%.
Energy Information Administration weekly storage report
U.S. natural gas storage volumes increased 13 billion cubic feet during the week ending July 30, according to the U.S. Energy Information Administration (EIA). Prior to the weekly storage report, analysts and market watchers didn’t seem to have a clear idea of the size of the expected injection.
According to NGI, a Wall Street Journal poll produced estimates ranging from an increase of 14 billion cubic feet to 34 billion cubic feet. Reuters polled 17 analysts, whose estimates were in the same range with a median injection of 21 billion cubic feet. A Bloomberg survey had a median injection of 18 Bcf, and NGI modeled a build of 17 Bcf.
The 13 Bcf build is lower than last year’s infection of 32 Bcf and the five-year average build of 30 Bcf, according to the EIA.
The working gas in storage rose to 2.727 Tcf. Storage volumes in the United States now stand at 542 Gcf, or 16.6% less than a year ago, or 3.269 Tcf, and 185 Gcf, or 6.4% less than the average quinquennial of 2 912 Tcf.
Short-term weather outlook
According to NatGasWeather from August 6 to 12, “National demand will be moderate for one last day as comfortable highs of the 70s to 80s persist in the Great Lakes and the Ohio Valley. Domestic demand will then increase to high levels this weekend through next week as temperatures warm in the east in the upper 80s through the mid-90s, while also being warm with highs in the mid 90s to 100 over Texas and South for a high to very high national level. request.
Weather systems with showers will cool the northwest this weekend in the 70s and 80s, although they get hot next week with highs ranging from the 80s to 100.
Overall, moderate domestic demand through Friday, then rising to high this weekend and very high next week.
Despite the moderate response to the EIA report, natural gas is bullish. Nothing has happened that will not change the fact that “there just isn’t enough supply to make the market feel comfortable with storage levels here and now,” according to Bespoke Weather Services .
Price action suggests that investors may be reluctant to buy strength at current price levels, suggesting that investors may still be in “buy down” mode.
Given the short-term range of $ 3.837 to $ 4.205, the short-term direction of the September natural gas futures contract will likely be determined by the trader’s reaction to his support zone at $ 4.021 to $ 3.978.