Natural Gas Price Fundamental Daily Forecast – Rangebound as Renewed Coronavirus Fears Cap Gains

Natural gas futures are edging lower on Friday shortly before the regular session opening as investors weigh the impact of the latest storage report against continued forecasts calling for more heat in June. Some traders are blaming the fear of a second outbreak of coronavirus on the early selling pressure. A second wave of COVID-19 would be devastating to demand.

At 11:54 GMT, July natural gas futures are trading $1.792, down $0.021 or -1.16%.

US Energy Information Administration Weekly Storage Report

The U.S. Energy information Administration reported Thursday that domestic supplies of natural gas rose by 93 billion cubic feet for the week ended June 5. That was slightly less than the average increase of 95 billion forecast by analysts polled by S&P Global Platts.

A Bloomberg poll of nine analysts found injection estimates ranging from 91 Bcf to 99 Bcf, with a median of 94 Bcf, on par with the five-year average. A Wall Street Journal survey produced an average of 93 Bcf injection. NGI estimated a 96 Bcf build.

Last year, the EIA recorded a 107 Bcf increase in storage for the similar week.

Total stocks now stand at 2.807 trillion cubic feet, up 748 billion cubic feet from a year ago, and 421 billion cubic feet above the five-year average.

Short-Term Weather Outlook

According to NatGasWeather for June 11-17, “Texas and the Southwest remain hot with highs of 90s and 100s for regionally strong demand. A weather system will exit the Midwest and push into the East the next few days with showers and comfortable with highs of 60s and 70s. A second system will follow into the East this weekend through early next week with highs of 60s to 80s. The West will remain warm the next few days, then cool as Pacific weather systems arrive. Overall, national demand easing to lighter levels through early next week as the East cools below normal.”

Daily Forecast

The return of warmer temperatures could cause enough regional demand to underpin prices, but gains could be limited by concerns over coronavirus-related demand. A second wave of COVID-19 would be devastating to the industry.

According to data compiled by Johns Hopkins University, the number of new coronavirus cases has risen in states like Arizona, South Carolina and Texas as they continue their reopening process. Arizona cases have nearly doubled since Memorial Day.

Meanwhile, Treasury Secretary Steven Mnuchin told CNBC’s Jim Cramer the U.S. can’t shut down the economy again.