Natural Gas Price Fundamental Daily Forecast – Traders Looking Beyond EIA Report; ‘Very Hot’ July 6-14

Natural gas futures are edging higher on Thursday shortly before the release of the government’s weekly storage report at 14:30 GMT. The market is trading inside Tuesday’s wide range for a second session, suggesting investor indecision and impending volatility.

The market has traded mostly sideways under volatile conditions since Tuesday’s surge to a multi-year high. Helping to put a lid on prices are spot gas prices, which weakened across the United States ahead of a much cooler outlook for the East Coast and the Independence Day holiday. Natural Gas Intelligence’s (NGI) Spot Gas National Average tumbled 47.0 cents to $3.610.

At 12:38 GMT, September natural gas futures are trading $3.685, up $0.061 or +1.68%.

US Energy Information Administration Weekly Storage Report

NGI wrote on Wednesday that estimates ahead of the Energy Information Administration (EIA) were close to the five-year average injection of 65 Bcf and last year’s 73 Bcf build.

NGI also reported a Bloomberg survey of 11 analysts produced a range of estimates from 59 Bcf to 75 Bcf, with a median of 68 Bcf. Reuters polled 18 analysts, whose estimates were as low as 55 Bcf and had a median infection of 68 Bcf. NGI modeled a 67 Bcf build.

Short-Term Weather Outlook

NatGasWeather said national demand would ease late this week through the coming weekend as a slow moving weather system tracks across the Great Lakes and eastern United States. This would cool highs into the upper 60s to lower 80s.

Short-Term Forecast

A short-term dip in the market would not be a surprise. Furthermore, it could offer traders a chance to reset ahead of what is expected to be a potentially bullish summer.

The pattern in July looks to be “very hot,” according to EBW Analytics Group. While demand is still expected to “fall sharply” over the holiday weekend, model runs have shortened the cooler weather in that period to only three days, from Friday through Sunday (July 2-4).

“Three weeks of very hot weather are still predicted nationally” beginning on Monday (July 5) and then spreading east, EBW analysts said. “The market might look past the holiday drop in demand, keeping prices high. At least some profit-taking is likely, though, before the week ends.”

NatGasWeather added the weather patterns remain hot enough to be considered bullish July 6-14, and likely longer.

If traders are still in the “buy the dip” mode, then look for any near-term weakness to be short-lived.