Natural Gas Price Fundamental Daily Forecast – EIA Report Expected to Show 82 Bcf Draw

Natural gas futures are inching higher on Thursday, shortly before the release of the government’s weekly storage report at 15:30 GMT.

Yesterday, the market closed lower for the fourth session out of six as mixed weather forecasts continued to weigh on investor sentiment. Sellers were also in control as Freeport LNG continued to offer no insight into when the processing plant would restart operations.

Furthermore, the U.S. House of Representatives voted to take measures to avert a national railroad strike. This news spooked a few of the weaker speculators, who had bet the strike would lead to increased demand, into to liquidating their long positions.

At 11:53 GMT, January natural gas futures are trading $7.042, up 0.112 or +1.62%. On Wednesday, the United States Natural Gas Fund ETF (UNG) settled at $21.23, down $0.91 or -4.11%.

Short-Term Weather Forecast

According to NatGasWeather for December 1-7, “Stronger national demand today into Friday in the wake of a chilly weather system that swept across the US with lows of 0s to 20s over the northern US and upper 20s to 40s over the southern US, including 30s deep Texas and the South.”

However, a warmer pattern will return across the southern and eastern US this weekend into early next week with highs of 50s to 70s for lighter national demand and despite fresh cold shots into the Northwest and Northern Plains with rain, snow, and lows of 0s to 30s.

Overall, strong demand today, then easing to moderate.”

US Energy Information Administration Weekly Storage Report

The Energy Information Administration (EIA) reported the first pull of the season last week, and analysts widely expect another robust withdrawal with the next EIA print, slated for Thursday at 15:30 GMT.

Natural Gas Intelligence (NGI) is saying a Bloomberg survey found withdrawal estimates ranging from 72 Bcf to 121 Bcf, with a median 82 Bcf decline in stocks. A Reuters poll found estimates spanning from pulls of 72 Bcf to 92 Bcf, and a median of 84 Bcf.

A Wall Street Journal poll, meanwhile, landed at an average withdrawal of 88 Bcf. Estimates ranged from decreases of 76 Bcf to 99 Bcf.

NGI modeled a pull of 89 Bcf. That compares with a decrease of 54 Bcf during the similar week of 2021 and a five-year average withdrawal of 34 Bcf.

Daily Forecast

Today’s report, which covers the week-ending November 25, is not expected to have too much of an impact on prices unless there is a big miss. Most traders are focused on the weather at this time of the year.

Also catching the eye of traders are two potentially bullish events:  a potential railway strike and the restart of the Freeport LNG plant. Both have the capability of spiking prices sharply higher.