Natural gas kept losing during early trading in Europe today. Yesterday futures fell in light of improving US stockpiles, while weather reports project a period of extended cooling over much of the US, paring big losses.
Natural gas futures due in June dropped by 0.21% at the new York Mercantile Exchange today, to trade for $4.713 per million British thermal units at 10:17 GMT, registering the lowest price in 2 weeks earlier at $4.691 per mBtu. Yesterday futures declined 0.51% on a daily basis, after rising inventories in the US reversed earlier gains on cooler weather. The contract has lost 0.63% this week, after adding 4.5% last Thursday.
Natgasweather.com reported that much of the central and north-eastern states will experience slightly cooler than normal weather in the next few days, before a slowly moving cold system from Canada moves in next week to halt readings at below-average for much of the central, eastern and some of the southern US. Meanwhile, the South will be warming-up for the next day or two, before a storm tracks in from the West. Over the next few weeks expectations are the active weather will persist, with periods of cool blasts, including Spring storms, followed by warming in some regions. Overall, the following days and weeks will see cooler than average weather, forecasting a higher demand for heating.
Accuweather.com reported that New York is set for an average day for April 25th, with temperatures ranging from 49 to 61 degrees Fahrenheit. Saturday will also be normal, before weather begins to slightly cool on Sunday and into next week, when readings will drop to as little as 46 degrees. For Boston Friday will be slightly warmer than Thursday, with readings between 44 and 60. During the weekend, however, temperatures will drop to 5-6 degrees below average, ranging from 40 to 53 degrees. In the mid-west, Chicago will be warmer today, with temps between 49 and 65 or 2-3 above average. Saturday, in sharp contrast, will bring impressive cold, with readings dropping as much as 10 degrees, before a slow warm-up starting on Sunday and through next week.
US natural gas stockpiles
Yesterday the Energy Information Administration released its weekly natural gas storage report for the week ended April 18th, which revealed a growth of 49 billion cubic feet in inventories, exceeding forecasts of a 44 bcf gain. It exceeded the previous weeks figure of a 24 bcf increase, bringing the volume of natural gas in storage to 899 bcf. Improving supplies push down on the blue fuel, though, after the harsh winter in the US drained the nations storage hubs. Even with last weeks gains the figure is still 52.9% below the 5-year average and prices remain at higher levels than before.
The previous report induced a major shift in the market, as natural gas rallied on better-than-expected demand. The government agency reported that US natural gas inventories rose by 24 billion cubic feet in the seven days through April 11th, compared to analysts’ forecasts for a 34-bcf jump, bumping prices 4.51%.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in June penetrates the first resistance level at $4.745 per million British thermal units, it will encounter next resistance at $4.767. If breached, upside movement will probably attempt to advance to $4.794 per mBtu.
If the energy source drops below its first resistance level at $4.696 per mBtu, it will see support at $4.669. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.647 per mBtu.
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