Natural Gas Price Fundamental Daily Forecast – Wide Range of EIA Report Guesses with 54 Bcf Average

Natural gas futures retreated on Wednesday ahead of today’s U.S. Energy Information’s weekly storage report at 1430 GMT. The report is expected to show the season’s first injection after a four week delay.

On Wednesday, June Natural Gas futures settled at $2.754, down $0.048 or -1.71%.

Here’s an updated weather forecast from NatGasWeather.com before we take a look at Thursday’s EIA report.

For the period May 3 to May 8, “Warm high pressure will continue over the southern and eastern halves of the country into the weekend with highs of 70s and 80s reaching Chicago to New York City for very light demand. The West into the Plains will see a mix of mild and cool periods as weather systems bring showers. A glancing shot of cooler air will impact the far northern U.S. Sunday and Monday, but otherwise a very comfortable U.S. pattern with low demand over most regions this weekend and next week.”

Forecast

We’re expecting a volatile session today. Not because of the weather, but because of the wide range of guesses ahead of this week’s EIA report.

NatGasWeather.com says, “Today’s EIA weekly storage report is expected to show a build in supplies of +49 to +52 Bcf by all but one national survey average, although ICE was a little larger at +55 Bcf. It was colder than normal over the Plains, South, Great Lakes, and East, while warmer than normal over the West.”

A Reuters survey of traders and analysts on average called for the EIA to report a 52 Bcf injection into Lower 48 gas stocks for the week-ending April 27, with responses ranging from 40 Bcf to 68 Bcf.

A Bloomberg survey produced a median build of 51 Bcf, with responses ranging from 40 Bcf to 62 Bcf.

IAF called predicted a 52 Bcf injection. Genscape forecasts a build of 55 Bcf and the ICE Exchange is looking for and injection of 55 Bcf.

This week’s report is also expected to show the year-on-five-year storage deficit widen to around 550 Bcf, and there are some concerns it won’t refill fast enough to satisfy the bullish traders.

Bearish traders believe it will fill fast enough and that it won’t become an issue unless temperatures rise well above average.

I think the easiest way to trade this report is to watch the daily chart. The range for 2018 is $2.975 to $2.638. Its 50% level or pivot is $2.807. Trader reaction to this pivot will determine if the bulls or bears are taking control.