Natural Gas Price Fundamental Daily Forecast – Weather News Dominates the Trade

Natural gas futures finished lower on Friday as summer heat moderated, a hurricane headed toward Florida potentially zapping cooling demand and surging coronavirus-cases continued to weigh on demand. Bespoke Weather Services expected temperatures in many parts of the country to cool down over the coming week.

Meanwhile, Isaias strengthened into a Category 1 hurricane late Thursday, according to the National Hurricane Center (NHC). At the end of the week, it looks as if the weather is going to dominate the news over the next week or two.

On Friday, September Natural Gas futures settled at $1.816, down $0.013 or -0.71%.

Bespoke also said its weather models showed “a sizable trough diving into the middle of the nation, which pushes eastward slowly” over the first full week of August. “We also expect some impact along the East Coast from Hurricane Isaias the next few days. It is not clear yet if the storm will bring demand destruction to the big cities of the East, but that is a possibility.”

The National Hurricane Center (NHC) said on Friday that the hurricane has crossed the Dominican Republic with sustained winds up to 80 mph and was battering the Southeastern Bahamas with heavy rains and strong winds that threatened severe flooding. The hurricane was expected to approach Florida’s east coast by Saturday, with rain totals up to six inches in some areas over the weekend, the NHC said.

In continuing our weather theme, analysts at Tudor, Pickering, Holt & Co. (TPH) said the sustained intensity of heat over most of July generated strong demand and eased the risk of filling storage.

“On the other hand, weather forecasts are trending materially cooler for August and this will likely push inventories above the high end of the five-year range through August,” the TPH analysts said. They said the latest injection “implies a roughly balanced market on weather-adjusted basis” and expect the coming week to look “very similar, with our early modeling pointing to a build of 26 Bcf.”

Looking ahead to next week, according to NatGasWeather.com for August 3-9, “An unseasonably strong cool shot will bring showers and comfortable highs of 70s to 80s to the central U.S., Midwest and Ohio Valley this week for much lighter national demand. Heavy rain is expected along the East Coast Monday – Tuesday as Tropical Storm Isaias tracks northward. Regionally hot conditions continue across the West and far southern U.S. with highs of 90s to 100s. Warmer conditions will push into the central and northern U.S. next weekend, while hot most elsewhere, increasing national demand back to strong levels.”