Natural Gas Price Fundamental Daily Forecast – Traders Booking Profits Ahead of EIA Report

Natural gas futures are trading lower on Thursday shortly before the release of the government’s weekly storage report at 14:30 GMT. The selling pressure was strong enough to take out the previous day’s low at $5.408, making $5.790 a new minor top.

Although the price action suggests intraday weakness, both the main and minor trends remain intact. This tends to indicate that the selling is being fueled by profit-taking and position-squaring ahead of the storage report.

At 12:28 GMT, December natural gas futures are trading $5.406, down $0.198 or -3.53%.

US Energy Information Administration Weekly Storage Report

Today’s EIA report for the week-ending September 10 is expected to show a build of 76 Billion Cubic Feet (Bcf) according to a consensus of estimates.

Energy Aspects estimated a 74 Bcf build and said this week’s report could launch a “string of more robust shoulder-season injections.”

According to Natural Gas Intelligence (NGI), a Wall Street Journal survey landed an average build estimate of 74 Bcf, with a range of 59 Bcf to 80 Bcf. A Reuters poll found injection estimates spanning from 59 Bcf to 85 Bcf, with a median of 77 Bcf. NGI estimated a 72 Bcf increase.

The five year average for this time of year is an increase of 79 Bcf. For the comparable week a year earlier, the EIA reported a build of 86 Bcf.

The EIA last week said utilities injected 52 Bcf into storage for the period ended September 3. The build put inventories at 2,923 Bcf, far lower than the year-earlier level of 3,515 Bcf.

Europe Facing Steep Winter Energy Bills

Households across Europe face much higher winter energy bills due to a global surge in wholesale power and gas prices and consumer groups have warned the most vulnerable in the region could be hit by fuel poverty as a result, Reuters reported.

Prices have sky-rocketed due to low gas storage stocks, high European Union carbon prices, low liquefied natural gas tanker deliveries due to higher demand from Asia, less gas supplies from Russian than usual, low renewable output and gas and nuclear maintenance outages.

Benchmark European gas prices at the Dutch TTF hub have risen by more than 250% since January, while benchmark German and French power contracts have both doubled.

Europe’s winter heating season typically begins in October and wholesale prices are not forecast to fall significantly during the remainder of this year.