Natural Gas Price Fundamental Daily Forecast – Bullish EIA Report Targets $2.370

Traders are looking for this week’s EIA weekly storage report to come at about 72 Billion Cubic Feet (BCF). Last year, the EIA recorded a 46 Bcf injection for the period, which covers the week-ended July 12. The five-year average is a build of 63 Bcf.
James Hyerczyk
Natural Gas

Natural gas is trading higher on Thursday, but in a tight range ahead of today’s regular session opening and weekly government storage report, due to be released at 14:30 GMT. For a third straight session, speculative buyers are trying to establish support inside a key technical area at $2.296 to $2.253. Trader reaction to this zone is likely to set the near-term tone.

At 10:53 GMT, September natural gas futures are trading $2.304, up $0.026 or +1.14%.

The price action suggests investors aren’t too concerned about the intense heat expected to hit the Midwest with several weather forecasters calling for more normal temperatures within a few days. The market may have hit a value zone or balance point on the daily chart. The zone will become support if hotter temperatures prevail, and turn into resistance if cooler temperatures dominate.

Daily September Natural Gas

Short-Term Weather Outlook

According to NatGasWeather for July 17-23, “(Hurricane) Barry will exit the Ohio Valley and Northeast today with showers ending. Hot high pressure will strengthen over the Midwest to Northeast through the weekend with highs of mid-90s from Chicago to New York City, while also hot with 90s across the southern & central US to drive very strong national demand. The Southwest will be very hot with highs of 110-110s, although comfortable across the Northwest with highs of 70s & 80s. Weather systems with showers and cooling will arrive over the Midwest and East early next week, easing highs back into the 70s & 80s. Overall, national demand will be very high through the weekend then easing.”

U.S. Energy Information Administration Weekly Storage Report

Traders are looking for this week’s EIA weekly storage report to come at about 72 Billion Cubic Feet (BCF).

Bloomberg is looking for a median of 69 Bcf with guesses ranging from 64 Bcf to 83 Bcf. Reuters is calling for a 65 Bcf build with guesses ranging from 54 Bcf to 78 Bcf. The ICE EIA Financial Weekly Index futures contract settled Tuesday at 60 Bcf, while Natural Gas Intelligence experts predict a 65 Bcf injection.

Last year, the EIA recorded a 46 Bcf injection for the period, which covers the week-ended July 12. The five-year average is a build of 63 Bcf.

Daily Forecast

The daily chart pattern indicates a bullish report could send prices soaring into at least $2.370.

A neutral report will likely hold prices inside $2.296 to $2.253.

Sellers could drive the market through $2.253 if the report is bearish.

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