Natural gas futures were little changed during early trade in Europe today. The US will report on natural gas storage levels tomorrow, and analysts expect another triple-digit gain for inventories.
Front month natural gas futures, due in August, added 0.07% at the New York Mercantile Exchange to trade for $4.458 per million British thermal units at 9:16 GMT today. Prices ranged from $4.459 to $4.435 per mBtu. The contract dropped 0.13% yesterday, reaching a monthly low of $4.403 per mBtu, after it added 1.18% on Monday.
The US Energy Information Administration (EIA) will post its weekly reading on natural gas inventories for the seven days ended June 27 tomorrow. NatGasWeather.com predicts a gain of slightly over 100 Billion cubic feet (Bcf).
The government agency revealed a 110 Bcf jump in stocks during last week. 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.
Total gas held in underground storage hubs was still 27.4% lower than last year’s levels during the comparable period. However, the EIA has suggested gains will continue to be above-average, and that most likely inventories will be completely replenished ahead of winter heating season.
“As we get close to July and August, the peak-demand months, we should expect some heat,” Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami, said for Bloomberg. “We sold off pretty hard last week after another triple-digit injection. We will see what July brings, but we are going to have another triple-digit this week and we will probably have another one the following week because the Fourth of July.”
US weather report
NatGasWeather.com reported earlier today, that the high pressure build-up over much of the central and southern US will keep temperatures relatively high, reaching above 100 in many places. A cooler weather system will track through the Midwest and Northeast, bringing showers and clouds and dragging readings down a few degrees, before another surge on high pressure later in the seven-day period. Cooling demand is projected to be moderate-to-high.
In the 8-14 day outlook, NatGasWeather.com projects a warmer trend for the US. The southern and central, as well as the western states will be relatively warm for the whole period, with the northern and eastern states experiencing some cool early on, though following suit soon after. Thunderstorms will increase over the South and Southwest as the monsoon season begins due to hot temperatures and high humidities.
New York will be cloudy and will see a few strong thunderstorms today, with readings ranging 74-90 degrees Fahrenheit, several above average. Tomorrow will also be quite warm, again with clouds and storms. July 4 will be cooler than usual, before a warm and sunny weekend. Chicago will be cloudy and chilly today, with readings some 15 degrees below average, at 57-68 degrees. Tomorrow and July 4 will still be quite cooler than normal, with highs in the mid 70s at most, while the weekend will see climbing temps with plenty of sun.
Down South, Houston will see sunny and warm weather today, with temperatures between 74 and 95 Fahrenheit, a few above average. Thursday and Friday, July 4, will be stormy, but averagely warm, while the weekend is expected to bring normal temps and plenty sun. Over on the West Coast, Los Angeles will be cooler than normal today, with readings a few below average at 64-76 degrees. Temps will climb over the following days for a sunny and moderately-warm July 4.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in August penetrates the first resistance level at $4.494 per million British thermal units, it will encounter next resistance at $4.534. If breached, upside movement will probably attempt to advance to $4.579 per mBtu.
If the energy source drops below its first resistance level at $4.409 per mBtu, it will see support at $4.364. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.324 per mBtu.
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