Natural Gas Price Fundamental Daily Forecast – EIA Storage Estimate 45 – 49 Bcf

Natural gas futures are trading flat shortly ahead of the regular session opening and the release of the latest storage data from the U.S. Energy Information Administration at 1430 GMT.

At 1107 GMT, September natural gas futures are trading $2.950, up 0.001 or +0.03%.

On Wednesday, prices spiked higher on concerns over the storage deficit and the return of warmer temperatures over several key demand areas.

Near-Term Weather

The most recent six- to 10-day temperature forecast from the National Weather Service calls for warmer-than-average temperatures for most of the Upper Midwest and Northeast, which will likely add to the recent strength the market has experienced.

Supply/Demand

Although power burn totals have weakened lately from record levels reached during the heat-wave in July, they are expected to increase with the return of warmer temperatures later this month. This comes at a time when U.S. dry production is leveling off. Recent data from S&P Global Platts shows U.S. dry production decreased 500 MMcf/d to 80.2 Bcf/d Wednesday, after being over 80 Bcf/d for the past six days.

Forecast

The current rally has put the September natural gas futures contract in a position to challenge a pair of tops from June at $2.992 and 3.018. The combination of a weaker-than-expected U.S. EIA storage report and a bullish weather report could drive prices into this area. Hedgers could show up on a test of this area.

Stronger-than-expected EIA data could put a lid on prices. However, don’t expect a pullback unless the weather pattern changes. Support comes in at $2.869.

Today’s EIA report is expected to show a build of about 49 billion. This is up from last week’s 35 billion reading. Platts is calling for a 45 Bcf build.