Natural Gas Price Fundamental Daily Forecast – Traders Looking for EIA Report to Show 80 to 90 Bcf Build

Natural gas futures are inching slightly higher on Thursday, straddling the psychological $2.50 level just slightly above the low of the week at $2.491. Helping to underpin the market were weather models showing a slight increase in demand over the next couple of weeks. Keeping a lid on prices, however, were reports that storage inventories have flipped to a surplus over last year’s levels.

At 08:28 GMT, June natural gas futures are trading $2.503, up 0.003 or +0.16%.

Short-term Weather Outlook

According to NatGasWeather for April 25 to May1, “Pleasant temperatures with highs of 60s to 80s will dominate much of the US the next couple days for very light national demand. There will be slightly cooler exceptions across the far northern US where highs will be in the 50s to 60s. A weather system with heavy showers will track across the east central US today, then across the East tomorrow. Cooling will follow behind this system this weekend, with additional weather systems across the central and northern US early next week. This will bring an increase in national demand as lows behind these systems dip into the 20s to 40s. The southern tier will be very warm with highs of 70s to 90s. Overall, national demand will be low to very low through Friday, then moderate.”

Daily Forecast

The price action on Thursday is likely to be driven by the results of the U.S. Energy Information Administration (EIA) weekly storage report, due to be released at 14:30 GMT.

The report is expected to show an injection in the upper 80 to 90 Bcf range. A number this high will push year/year inventories to a surplus.

Bloomberg analysts are calling for an injection range of 69 Bcf to 98 Bcf, with a median of 92 Bcf. The Wall Street Journal estimates a range of 82 Bcf to 94 Bcf, with a median of 89 Bcf. Reuters is calling for a range of 69 Bcf to 95 Bcf, with a median build of 91 Bcf. Natural Gas Intelligence calls for an 82 Bcf build.

In 2018, the EIA reported a 20 Bcf withdrawal, while the five-year average injection comes in at 47 Bcf. Inventories as of the EIA’s April 12 report came in at 1,247 Bcf, just 57 Bcf below the year-ago level and 414 Bcf below the five-year average.

The overall trend is down and prices are expected to fall further until the summer cooling season begins. However, the market may be ripe for periodic short-covering rallies. These will create additional selling opportunities.