Natural Gas Price Fundamental Daily Forecast – Wide Range of Guesses Ahead of Today’s EIA Report

Natural gas futures are trading lower Thursday ahead of today’s U.S. Energy Information Administration’s (EIA) weekly storage report.

At 0832 GMT, June Natural Gas is trading $2.717, down $0.020 or -0.77%.

National Weather Service forecasts for both the six-to-10-day and eight-to-14-day periods show above-average temperatures enveloping nearly the entire US, confining the scope of average temperatures to a small patch of the Rockies into the Midwest in the shorter-range view and a few areas of Texas further out.

NatGasWeather.com for the period May 9-15 says, “High pressure will dominate most of the country this week with very comfortable spring conditions where highs will reach the 70s to mid-80s. There will be exceptions to the hotter side over the Southwest into Texas where 90s to 100s will be found, while cooler across the north-central U.S. where a weak weather system will bring showers and highs of 60s to lower 70s. A stronger weather system will track into the central U.S. this weekend but still with a mostly comfortable U.S. pattern and highs of 70s and 80s and low demand.”

Forecast

For a second consecutive week, we’re looking at looking at a wide range of guesses going into today’s EIA storage report.

A Reuters survey of traders and analysts on average is predicting a 91 Bcf build. Their range is 75 Bcf to 114 Bcf.

A Bloomberg survey calls for a median 90 Bcf injection, with a range of 62 Bcf to 114 Bcf.

IAF Advisors analyst Kyle Cooper is calling for a 96 Bcf build, while Intercontinental Exchange EIA storage futures settled Tuesday at an injection of 94 Bcf for the upcoming report.

We’re looking for a volatile reaction to today’s report because the accuracy of the estimates have been suspect lately.

The market could come under pressure over the near-term if production remains high. Prices could plunge if today’s report shows a triple-digit build. There is some upside risk if current above-normal temperatures continue to linger, producing unexpected cooling demand.