Natural gas futures traded even during early hours in Europe today, after a slide yesterday on expectations of significant gains for inventories in the US. Stockpiles in the States are a major factor in natgas prices, as the country consumes more than 21% of the worlds supply of blue fuel. Meanwhile, weather reports project a warming over the next few days for most of the US, with some unimpressive cool blasts to follow.
Front month natural gas futures, due in June, lost 0.17% at the new York Mercantile Exchange to trade for $4.732 per million British thermal units at 9:45 GMT. Prices ranged from $4.727 to $4.754 per mBtu. Yesterday the contract lost 1.23% on forecast supplies in the US, while it added 2.37% on Tuesday.
Natgasweather.com reported that the mid-Atlantic states, alongside the Southeast and regions of the Northeast and Midwest will be warming nicely the next few days, as the system of high pressure over the South Plains moves eastward. Meanwhile, a period of exciting weather will be setting roots over the central states, as a system moves in from the West. Over the following weeks a set of weak cold blasts will be penetrating from Canada to reach deep into the Southeast, though temperatures will not be lowered by much. On the Pacific Coast, temperatures will be on-par with the average for this time of year. Next week is projected to bring more record-breaking heat for the region, lifting power demand expectations.
According to Accuweather.com, New York will be cloudy and rainy for the following days. Temperatures will range 52 to 64 degrees Fahrenheit, before a warm-up during the weekend and into next week, when readings are expected top 80 degrees. The weather in Boston will also be cloudy, with forecasts of 50-66 degrees today and 52-58 degrees on Friday, slightly below average. Starting on Saturday, however, readings will rise to push 80 early next week. Chicago is set to be warm today, with temperatures forecast exceed 80 degrees Fahrenheit, 10 above the average high for the day. Over the weekend the weather will be cloudy, though still warmer than normal. Early next week, however, readings will drop to several degrees below average, as cool air from Canada tracks south. On the West Coast, Los Angeles will experience normal temperatures today, and through the weekend, with highs at 72-75 and lows around 55-57. Next week another heatwave is expected to push readings in the high 90s.
US inventories
Later today the report on natural gas stockpiles in the US for the week ended May 2nd is due. Expectations put gains at 71 billion cubic feet, down from last weeks 82 bcf increase. The forecast slowdown is attributed to the slightly cooler weather over the eastern states last week, in addition to a greater power demand on the West Coast, where a heatwave pushed readings up to record values.
Inventories are still replenishing after an extremely cold winter drained supplies. With last weeks gains, they stand at 44.1% below the figure from last year, and 50.1% under 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 $4.809 per million British thermal units, it will encounter next resistance at $4.879. If broken, upside movement will probably attempt to advance to $4.930 per mBtu.
If the energy source drops below the first support level at $4.688 per mBtu, it will probably test $4.637. If the second key support zone is breached, the blue fuel’s downward movement may extend to $4.567 per mBtu.
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