Natural gas futures traded bearishly during early hours in Europe, as the market is expecting the weekly report on blue fuel stockpiles in the US to show a sizable gain in inventories. An extended period of cooler-than-usual weather over the eastern half of the US drove prices to 2-month highs.
Front month natural gas futures, due in June, lost 0.46% at the new York Mercantile Exchange, to trade for $4.793 per million British thermal units at 9:37 GMT. Prices ranged from $4.787 to $4.823 per mBtu. Yesterday the contract fell 0.67%, though it recorded the highest midday price since winter at $4.852 per mBtu.
Natgasweather.com reported that the storm system over the eastern US will continue to generate some thunderstorms and local heavy rains. The cold Canadian air, which found itself in the southern US, will persist through the next few days, dragging readings down to the 40s and 30s in some places. Further cold blasts coming across the Great Lakes will settle in the Midwest and Northeast next week, keeping the cooler weather. The South Plains will see a build-up of higher pressure, which will collide with the cooler Canadian system to birth strong storms. Meanwhile, the West Coast is experiencing impressive heat, closing in on record-high readings.
According to Accuweather.com, the weather in Chicago will still be cooler than usual today, with temperatures ranging 42 to 52 degrees Fahrenheit, 6-7 below average. The next few days will see limited warm-up, with readings topping no more than 58-60 degrees. New York is set for a warmer Thursday, with temperatures between 54 and 73 degrees, which is 5-6 above the normal for the day. Starting tomorrow, however, the weather will normalize, before a slightly cooler weekend, at 2-3 below average. Elsewhere, Los Angeles is about to experience the hottest May 1st on record. Readings will push the 100 degree mark, beating the previous record of 89 set in 1929. Beginning on Friday temperatures will start to slightly drop, to enter average range next week.
US inventories
Natural gas stockpiles in the US are expected to have added 75 billion cubic feet in supplies. The rise would grow on last weeks 49 bcf increase, to put the total volume of the blue fuel at 974 bcf.
After this winters brutally cold weather, natural gas supplies in the US were depleted, and as of last week stood at 52.9% below the 5-year average.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in June breaches the first resistance level at $4.861 per million British thermal units, it will encounter next resistance at $4.907. If broken, upside movement will probably attempt to advance to $4.962 per mBtu.
If the energy source drops below the first support level at $4.760 per mBtu, it will probably test $4.705. If the second key support zone is breached, the blue fuel’s downward movement may extend to $4.659 per mBtu.
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