Natural Gas Price Fundamental Daily Forecast – EIA Storage Report Expected to Show 75 Bcf Build

The sideways price action the last eight sessions suggests that speculative bulls are having a hard time letting go of their long positions, and the major short-sellers are having a difficult time regaining control although they haven’t been spooked into aggressively covering their positions either.
James Hyerczyk
Natural Gas

Natural gas futures are trading lower on Thursday shortly before the regular session opening and the release of the government’s weekly storage report at 14:30 GMT. Prices fell sharply on Wednesday and are under pressure today because traders are expecting the report to come in near-average. Additionally, in the spot market, cooler conditions in the Northeast and in the West, along with heavy tropical rains along the Texas Gulf Coast are likely to weigh on demand.

At 12:02 GMT, November natural gas is trading $2.660, down $0.005 or -0.19%.

US Energy Information Administration Weekly Storage Report

Today’s EIA weekly storage report is expected to post a near- or slightly below-average build, coming in at about 75 Bcf.

Reuters analysts are predicting a 78 Bcf consensus, with predictions ranging from 71 Bcf up to 85 Bcf. The Intercontinental Exchange EIA Financial Weekly Index futures contract settled at 86 Bcf on Tuesday. Natural Gas Intelligence’s model is predicting a 79 Bcf build.

Last year, the EIA recorded an 84 Bcf build for the period, and the five-year average is an injection of 82 Bcf.

Short-Term Weather Outlook

According to NatGasWeather for September 19-25, “Strong high pressure continues across Texas and the South with highs of 80s to 90s for strong late season demand. The exception with be across eastern Texas and Louisiana where rains from a tropical system continue, including highs of only 80s. The western and central US will be unsettled as weather systems bring showers and highs of mostly 60s and 70s with lows of 30s and 40s. The corridor from Chicago to New York City will be comfortable with highs of 70s to 80 for light demand. Overall, national demand will be high across the southern US and low across the northern US, averaging out to moderate.”

Daily November Natural Gas

Daily Forecast

The sideways price action the last eight sessions suggests that speculative bulls are having a hard time letting go of their long positions, and the major short-sellers are having a difficult time regaining control although they haven’t been spooked into aggressively covering their positions either.

The daily chart indicates if the market is going to weaken, it could go straight down since support is spread wide apart. On the other hand, the longs may be looking beyond late September and October, remembering last year’s price spike on early winter cold. Additionally, there are still commodity funds holding net short positions, who may want to cover.

Technically, the main trend is up. However, momentum shifted to the downside on Tuesday with the formation of a closing price reversal top at $2.745.

A trade through $2.551 will change the main trend to down. This could trigger an acceleration to the downside with the next target coming in at $2.440. A trade through $2.745 will signal a resumption of the uptrend.

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