Natural Gas Price Fundamental Daily Forecast – EIA Storage Report is Expected to Show Season’s First Build

Natural gas futures are trading nearly flat early Thursday as traders position themselves ahead of the government’s weekly storage report at 14:30 GMT and the start of the long Easter weekend. The market edged lower during the previous session, weighed down by expectations of low weather-related demand and in anticipation of a bearish report from the U.S. Energy Information Administration (EIA).

At 08:12 GMT, May natural gas futures are trading $2.607, down $0.001 or -0.04%.

US Energy Information Administration Storage Report

Last week, the EIA reported a withdrawal of 36 Bcf for the week ended March 19. The decrease in stocks for the March 19 week lowered inventories to 1,746 Bcf, compared with the year-earlier level of 2,009 Bcf and the five-year average of 1,824 Bcf.

Ahead of the EIA weekly storage report for the week-ending March 26, Natural Gas Intelligence (NGI) is reporting that its model is predicting a build of 18 Bcf. A Bloomberg survey showed a median 19 Bcf injection prediction, based on estimates ranging from injections of 13 Bcf up to 41 Bcf. A Reuters weekly poll produced the same range injection estimates, with a median increase of 20 Bcf.

Last year, the EIA recorded a 20 Bcf withdrawal for the period, while the five-year average is a pull of 24 Bcf.

Technical Outlook

The main trend is down, however, momentum is trending higher. A trade through $2.750 will change the main trend to up. A move through $2.459 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum.

The main range is $2.352 to $3.060. The market is currently trading inside its 50% to 61.8% retracement zone at $2.706 to $2.622. This zone is controlling the near-term direction of the market.

The minor range is $2.459 to $2.688. Its retracement zone at $2.574 to $2.546 is potential support. The upper level of this zone may have stopped the selling early Wednesday.

There are two ways to look at the market.

The bigger picture says look for a bullish tone to develop on a sustained move over $2.706 and a bearish tone to develop on a sustained move under $2.622.

The short-term picture shows potential support at the minor 50% level at $2.574. However, crossing to the weak side of the 61.8% level at $2.546 could trigger an acceleration into $2.459.

Daily Forecast

According to Bespoke Weather Services, without a turn in weather, power burns would need to strengthen the next few weeks to support a rally in futures. “Absent that, it will take another bullish” surprise from Thursday’s U.S. Energy Information Administration (EIA) storage report “to avoid moving lower in the prompt month,” Bespoke said.

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