Natural Gas Price Fundamental Daily Forecast – Traders Looking for EIA Report to Show 110 Bcf Build

Natural gas futures are trading lower shortly after the regular session opening and the release of the latest government weekly storage report. The price action suggests investors are looking for a large triple-digit gain. Additionally, it also indicates that traders have been disappointed this week by the latest weather forecasts.

At 13:14 GMT, July natural gas futures are trading $2.370, down $0.016 or -0.67%.

Short-Term Weather Outlooks

After a three-day counter-trend rally, natural gas prices turned lower on Wednesday and are trending lower early Thursday, as traders shifted their focus on an expected triple-digit storage build rather than some weather models calling for the return of heat. Mixed spot prices also offered no relief for the bulls.

Bespoke Weather Services is predicting hotter trends “based on shifts in tropical forcing patterns and what should be another temporary backing off of the intensity of the El Nino state.”

NatGasWeather said, “Where the data has been hotter is with strong high pressure across the eastern half of the country beginning next week, then pulsing even stronger with it June 24-26.”

U.S. Energy Information Administration (EIA) Report

Traders are looking for another triple-digit build in this week’s EIA storage report for the week-ending June 7. Last year, the EIA reported a 95 Bcf increase to inventories for the similar week, and the five-year average stands at 92 Bcf.

Bloomberg is looking for an injection range of 98 Bcf to 124 Bcf, with a median of 110 Bcf. The Wall Street Journal is forecasting an injection range of 102 Bcf to 118 Bcf, with a median of 110 Bcf. Reuters is predicting an injection range of 102 Bcf to 124 Bcf, and a median of 109 Bcf. Natural Gas Intelligence is predicting a 108 Bcf injection.

Daily Forecast

A lower-than-expected EIA injection combined with the return of hot temperatures could spike prices higher after the report is released at 14:30 GMT. The daily chart indicates $2.518 to $2.568 is the primary upside target.

A bearish EIA report will not necessarily drive prices lower because investors are likely to shift their focus back to forecasts for higher demand due to the expected heat after June 18.