Natural Gas Price Fundamental Daily Forecast – Edgy Traders Looking for 25 Bcf EIA Storage Build

James Hyerczyk
Published: Sep 2, 2021, 14:26 GMT+00:00

Most analysts are looking for a build between 19 and 26 Bcf. An EIA number near the low end of the range could send prices skyrocketing gain.

Natural Gas

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Natural gas futures are trading higher shortly after the New York opening on Thursday and before the release of the U.S. Energy Information Administration’s weekly storage report at 14:30 GMT.

Traders are nervous ahead of the report following a 7% surge on Wednesday after a dent to production in the U.S. Gulf of Mexico in the aftermath of Hurricane Ida further elevated prices. Traders are preparing for an inventory report that is likely to show a low addition to stockpiles.

At 14:00 GMT, October natural gas futures are trading $4.653, up $0.038 or +0.82%.

“The surge has been spurred on by short-covering and anticipation of a very bullish small storage injection expected in this week’s storage report. Production losses due to Hurricane Ida are likely to weigh on the storage injection in the current week,” said Daniel Myers, market analysts at Gelber & Associates in Houston.

US Energy Information Administration Weekly Storage Report

According to a consensus of estimates, U.S. energy firms likely injected a lower-than-normal 25 billion cubic feet (Bcf) of natural gas into storage last week as unusually warm weather lifted demand for fuel to power air conditioning, a Reuters poll of analysts showed on Wednesday.

According to Natural Gas Intelligence (NGI), a Bloomberg survey found injection estimates ranging from 22 Bcf to 29 Bcf, with a median of 25 Bcf. A Reuters poll produced the same median figure and found estimates spanning from a build of 19 Bcf to an increase of 34 Bcf. A Wall Street Journal poll landed at an average injection of 25 Bcf, with estimates ranging from 19 Bcf to 33 Bcf.

NGI modeled a 28 Bcf injection for the EIA report, which covers net changes to Lower 48 gas stocks during the week-ended August 27. Last year, the EIA recorded a 36 Bcf build for the period. The five-year average increase is 53 Bcf.

Daily Forecast

Most analysts are looking for a build between 19 and 26 Bcf. An EIA number near the low end of the range could send prices skyrocketing gain. A build near the top end of the range wouldn’t be bearish per se because of other issues, but it could encourage some traders to trim their bullish bets.

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About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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