Natural Gas Price Fundamental Daily Forecast – Traders Looking for EIA Build of 60 Bcf, Weather Concerns Easing

Natural gas futures are trading flat on Thursday ahead of today’s U.S. Energy Information Administration’s weekly inventories report at 1430 GMT. The selling is being driven by reports of record production and continued cool short-term trends. This news also dampened the previously bullish winter strip which dragged down the front-month October contract throughout the session.

At 1242 GMT, October Natural Gas is trading $2.795 unchanged.

Weather

According to Natgasweather.com for the September 5 to September 11 period, “Slightly stronger than normal national demand continues today as hot high pressure dominates the Ohio Valley and East with highs of 80s to 90s. It remains very warm over the South and Southeast, although with areas of showers that will limit the coverage of 90s, aided by Tropical Storm Gordon. The West will be mostly warm to hot with highs of mid-80s to 100s. A cool front continues pushing through the Plains and Midwest with showers and cooling with highs of only 60s and 70s. Overall, national demand will be high easing to moderate.

Forecast

According to the consensus, today’s U.S. Energy Information Administration’s weekly storage report is expected to show a storage build in the low 60s Bcf for the week-ending August 31.

Reuters is predicting a 62 Bcf build, between the five-year average 65 Bcf injection and the 60 Bcf build recorded in the year-ago period. Its range of guesses is 51 Bcf to 69 Bcf.

Bloomberg is estimating a median 61 Bcf injection with a range of 52 Bcf to 69 Bcf.

Chart Pattern

The main trend is down according to the daily chart. The market would have to cross $2.931 to turn the main trend to up. A trade through $2.751 would reaffirm the downtrend with additional support at $2.703 to $2.688.

The main range is $2.688 to $2.979. Its 50% to 61.8% retracement zone is $2.833 to $2.799. Trading on the weak-side of $2.799 puts the market in a vulnerable position.

Overcoming $2.799 will indicate the selling pressure is getting weaker. Crossing to the strong side of $2.838 could trigger a short-covering rally with $2.865 the next objective.