Natural gas futures were moderately higher during early trade in Europe today. Prices plummeted yesterday, as the US posted another sizable injection for blue fuel stockpiles. Weather patterns project a hot start to next week and July.
Front month natural gas futures, due in August, added 0.32% at the New York Mercantile Exchange to trade for $4.455 per million British thermal units at 9:31 GMT today. Prices ranged from $4.459 to $4.435 per mBtu. The contract dropped 2.80% yesterday, and so far this week the blue fuel has lost about 2.4%.
The EIA released its weekly natural gas inventories report yesterday, to reveal a 110 Billion cubic feet (Bcf) for stocks. A wide array of estimates were cast ahead of the report, ranging from 93 to 107 Bcf. NatGasWeather.com had predicted a 102-107 Bcf increase, while Tim Evans, an energy analyst at Citi Futures in New York, gave a 93 Bcf figure for Bloomberg.
“We continue to underestimate the market’s ability to get gas into the ground,” Stephen Schork, president of Schork Group Inc., said for Bloomberg. “It was a very large number and it was a bearish number.”
Stocks remain 27.4% below last year’s reading for the same period. The EIA, however, has suggested gains will continue to be above-average, and that most likely inventories will be completely replenished ahead of winter heating season.
“The latest forecasts suggests that the call on nat gas for cooling demand will not be atypical for this time of the year and thus inventory injections are likely to continue to outperform the historical injections,” Dominick Chirichella, senior partner at the Energy Management Institute in New York, said before the report, cited by Bloomberg. He had predicted a 101 Bcf gain for nat gas inventories.
NatGasWeather.com reminded that the 5-year average for next is only 73 Bcf, after 85 Bcf for this one. The group predicts an injection of about 100 Bcf in the report due next Thursday.
US weather report
NatGasWeather.com reported that the US will see high pressure building up over the Midwest and Northeast, allowing for rising temperatures, which will reach into the 90s. A cooler system is moving eastwards through the Rockies, but will hardly impact readings as high pressure over the northern Plains will dampen much of its potency. However, the system will probably push readings down a few degrees later next week. Overall cooling demand will probably remain moderate-to-high.
In the 8-14 day outlook, NatGasWeather.com projects a warmer trend for the US. The high pressure over the southern US will expand into the North, lifting temperatures after the cooler system passes by. The southern, western and central US will see triple-digit readings.
New York will be slightly cooler than usual today, according to AccuWeather.com, as a strong afternoon thunderstorm will probably pass by. Readings will range 63-80 degrees Fahrenheit, a few degrees below average. The weekend will be sunny and warmer, with temperatures mid 60s to 80, with further rising readings early next week. Boston temperatures will be a few degrees below normal today, between 59 and 76, with mostly sunny weather. Temperatures be higher for the weekend, with highs in the 80s and mostly sunny and pleasant weather.
Chicago will be quite rainy and cloudy today and over the weekend, with temperatures between 70 and 83 degrees Fahrenheit. Some severe thunderstorms will probably pass by. Down South, Houston will see quite a few storms today and tomorrow, though temperatures will remain seasonal, largely ranging upper 70s to about 90. On Sunday and early next week it will be sunny and warmer.
Over on the West Coast, Los Angeles will have mostly sunny weather over the following few days, with readings ranging lower 60s to upper 70s, slightly lower than usual. Seattle will be partly cloudy today, with temperatures between 55 and 65, several below average. Saturday will also see some showers and mostly clouds, before the skies clear on Sunday and the weather warms up early next week.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in August penetrates the first resistance level at $4.564 per million British thermal units, it will encounter next resistance at $4.688. If breached, upside movement will probably attempt to advance to $4.767 per mBtu.
If the energy source drops below its first resistance level at $4.361 per mBtu, it will see support at $4.282. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.158 per mBtu.
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