Natural Gas Price Fundamental Daily Forecast – EIA Report Median Estimate 91 BCF in Line with 5-Year Average

Natural gas prices are trading weaker early Thursday as investors position-themselves ahead to today’s government storage report. The market has been choppy this week, first spiking higher on weather concerns then breaking as these same concerns abated.

At 0950 GMT, August Natural Gas futures settled at $2.933, down 0.015 or -0.51%.

Prices continue to be influenced by slightly warmer trends in the current weather models and expectations of a near to slightly below-average storage injection on Thursday.

A slight shift in the weather forecast on Wednesday pushed prices lower after Tuesday’s strong surge. The new forecasts were mixed, showing some hot days and some cool days. This was not good news for the bullish traders who were banking on forecasts from earlier in the week, calling for hotter temperatures into the end of the month.

The new forecast from NatGasWeather.com is now calling for milder temperatures over the East into the end of June.

According to NatGasWeather.com, for June 14-18, “A hot upper ridge will dominate the central and southern U.S. this week with highs of upper 80s to 100s for strong demand. The northern U.S. will see numerous weather systems track across with showers and slightly cool versus normal conditions with highs mainly in the 60s to 80s for light heating and cooling demand. A warm break will spread across the northern and eastern U.S. this weekend into next week for stronger demand. The West will be heating up this week with highs mainly in the 80s to 100s, then cooling this weekend.”

As far as today’s U.S. Energy Information Administration’s weekly storage report is concerned, market estimates are calling for a build of 86-94 Bcf, in line with the five-year average of a 91 Bcf build.

Bloomberg is estimating a range of 82 to 95 Bcf, with a median expectation of 90 Bcf. Reuters is calling for a range of 82 to 95 Bcf, with a median expectation of 90 Bcf.

Last year, the EIA reported an injection of 82 Bcf, while the five-year average build stands at 91 Bcf. If the estimates are in line with expectations, this week’s build would boost stockpiles to 1.907 Tcf, the lowest for that week since 2014. That would be about 29% below the level in the same week a year ago and around 21% below the five-year average.

Basically, the theme in the market is expected to remain the same, the weather is not hot enough to trigger a break out to the upside, while the supply deficit is large enough to continue to provide support.