Natural gas steady ahead of EIA report

Natural gas swung between gains and losses on Thursday ahead of EIAs weekly report that is poised to show the U.S. Natural Gas Storage Indicator gained more last week than the comparable 7-day period last year.

On the New York Mercantile Exchange, natural gas for September delivery traded at $3.707 per million British thermal units, up 0.11% on the day. Prices shifted between gains and losses and touched days high and low at $3.728 and $3.682 per mBtu respectively. The fuel fell 0.6% on Wednesday, pressured by a broadly stronger dollar, extending this weeks decline to 1.6% after it settled 3.56% higher the previous one.

Natural gas was pressured this week as weather forecasting models pointed at cooling temperatures across key consuming areas. MDA Weather Services and the U.S. National Weather Service expect normal and even below-normal temperatures to settle over parts of the eastern half of the nation for the next several days. When above-normal temperatures are expected, natural gas surges as increased electricity demand to power air-conditioning calls for more supply of the fuel, which is used for a quarter of the U.S. electricity generation. Mild temperatures have the opposite effect.

Market players are looking ahead into this weeks natural gas reserves report by the EIA. According to a survey among Platts analysts, the energy information arm of McGraw-Hill Cos., preliminary injection estimates for this week’s data range between 47 billion cubic feet and 51 billion. This is well above last year’s 26 billion cubic feet increase during the comparable week and also higher than the five-year average build of 53 billion cubic feet.

Last Thursday, the Energy Information Administration reported natural gas stockpiles rose less than expected, which shot the fuel up more than 4% on the day. According to the EIA, U.S. Natural Gas Storage rose by 58 billion cubic feet to 2 745 billion as of the week ending July 12. This was below market expectations for a 64 billion cubic feet gain and the five-year average 70 billion.

During the same week last year, natural gas reserves rose by 29 billion cubic feet to 3 159 billion, which was 13.1% higher than last week’s total stockpiles. The five-year average Natural Gas Storage stood at 2 779 billion cubic feet, 1.2% above the current.

Elsewhere on the market, WTI crude and Brent oil fell on the day. Light, sweet crude for September delivery traded at $104.55 a barrel at 12:34 GMT, down 0.8% on the day. Prices held in range between days high and low of $105.42 and $104.35 per barrel respectively. The European benchmark traded at $106.95 a barrel, down 0.22% for the day. The September contract varied between high and low of $107.20 and $106.56 per barrel.