Natural Gas Price Fundamental Daily Forecast – Traders Looking for EIA Report to Show 100 Bcf Injection

Natural gas futures are inching lower on Thursday shortly ahead of the regular session opening and the release of the latest U.S. Energy Information Administration (EIA) weekly storage report at 14:30 GMT. Traders are also bracing for the latest 11 to 15 day weather forecast which could set the tone for the next 3 to 5 sessions.

At 11:31 GMT, August natural gas futures are trading $2.266, down 0.002 or -0.09%.

Technically, the main trend is down. A trade through $2.413 will change the main trend to up. A move through $2.134 will signal a resumption of the downtrend. The 50% level of this range is $2.274. Based on the price action this week, trader reaction to this level is likely to determine the direction of the market the rest of the week.

The new short-term range is $2.134 to $2.305. If the market weakens then look for a pullback into its retracement zone at $2.219 to $2.199.

Bespoke Weather Services forecast hotter temperatures over the six- to 10-day and 11-15 day periods, but traders weren’t very impressed. “We are not seeing extreme heat in any one region, but just broad coverage of above normal temperatures combined with a lack of any notable cool anomalies outside of near the West Coast over the next week or so.”

Short-Term Weather Outlook

According to NatGasWeather for June 27 to July 3, “Weather systems will bring showers and thunderstorms across the northern US although continuing to get warmer with highs of upper 80s to lower 90s from Chicago to NYC. The southern half of the US will be hot with highs of 90s over Texas, the South & Southeast, with 100s over the Southwest, although still with pockets of showers and local cooling. Overall, demand will increase to moderate-high as highs of upper 80s and 90s gain in coverage.”

“Today’s EIA weekly storage report is expected to show a build of +100 Bcf by most national survey averages, larger than the 5-year average of +70 Bcf. It was to the cooler than normal over much of the interior, while very warm to hot across the West Coast, far southern US, and East.” NatGasWeather’s algorithm favors a build of +98 Bcf.

U.S. Energy Information Administration Weekly Storage Report

This year, inventories have moved the needle from bullish to bearish with a shift in inventories from a deficit to a 200 Bcf year/year surplus. Additionally, the gap on the five-year average chart has tightened.

Traders are looking forward to another 100 Bcf-plus injection in this week’s report. This would be the seventh in a row. Bloomberg is looking for a median injection of 100 Bcf, Reuters is calling for an injection of 103 Bcf.

Other News

According to the Commodity Futures Trading Commission (CFTC), the market is twice as short as it was in mid-April and as short as it has been since July 2018. This usually means that any bit of bullish news could trigger a short-covering rally.