Natural gas trading outlook: futures pare some gains; most of the US remains cooler

Natural gas futures dropped during early trading in Europe today, after reaching the highest price since winter on Tuesday. Weather forecasts project a cooler week for the eastern half of the US, while the West Coast is set for a few very hot days.

Front month natural gas futures, due in June, lost 0.33% at the new York Mercantile Exchange, to trade for $4.815 per million British thermal units at 9:27 GMT. Prices ranged from $4.802 to $4.843 per mBtu. Yesterday the contract added 0.67%, reaching the highest midday price since winter at $4.848 per mBtu, while Monday’s session closed for a 3.03% gain on cooler weather over the US.

Natgasweather.com reported that the severe storm over the US will keep punishing the eastern and southern states with afternoon thunderstorms and rains today, as it slowly moves eastward. Over the following days cool Canadian air will set the stage for higher heating demand over much of the central, southern and eastern US. Beginning next week, a build-up of high-pressure over the southern plains will collide with the much cooler Canadian system to produce impressive storms and a very unsettled weather over much of the US. In contrast with the cool over in the eastern half of the country, the West Coast is in the grip of a heatwave, which will persist until next week when the weather will normalize.

According to Accuweather.com, April 30th will be colder than usual for New York, where temperatures will not vary much from 50 degrees Fahrenheit, 16 degrees below the average high for the day. Thursday is set for a sizable warm-up, though a thunderstorm might bring readings down, before temperatures normalize for the weekend. Chicago will see 40 to 55 degrees today, 7-8 below the average. The cooler weather will persist through to the end of this week and into the next, with below-average readings most of the time. Los Angeles will be pushing all-time-high readings today and tomorrow, temperatures topping 90 degrees in the early afternoon. Beginning on Friday the weather will begin to slowly normalize to enter average range next week.

Natural gas stockpiles in the US grew by 49 billion cubic feet last week, beating forecasts of a 44 bcf gain, and pushing down on the blue fuel. Thursday will see the report for the week ended April 25th, and expectations are the colder weather over most of the US has made possible only modest gains, if any.

Technical view

According to Binary Tribune’s daily analysis, in case natural gas for settlement in June penetrates the first resistance level at $4.868 per million British thermal units, it will encounter next resistance at $4.905. If breached, upside movement will probably attempt to advance to $4.962 per mBtu.

If the energy source drops below its first support level at $4.774 per mBtu, it will probably test $4.717. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.680 per mBtu.