Natural gas contracts retained downward momentum after a significant drop on a bearish report from the US yesterday. Weather reports forecast a warming over most of the eastern states in the following days, while the West Coast will be experiencing another heatwave next week.
Front month natural gas futures, due in June, lost 0.26% at the New York Mercantile Exchange to trade for $4.560 per million British thermal units at 8:13 GMT. Prices ranged from $4.557 to $4.593 per mBtu, nearing the lowest point in 20 days. Over the previous four sessions the contract lost 2.33% as the weather over the US continued to improve and allowed for a stockpile buildup.
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 series 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. However, next week is projected to bring more record-breaking heat for the region, suggesting higher power demand.
According to Accuweather.com New York will be cloudy and rainy today, which will drag down the daily high reading to no more than 61 degrees Fahrenheit, though the low will be above average at 59 degrees. Over the next few days a significant warm-up is expected to push temperatures up into the 80s. Boston weather will be similar to that of New York, with rain and clouds today and rising temperatures to follow. Chicago will also be cloudy, though warmer than usual today and over the weekend, with temperatures ranging 55 to 77 degrees Fahrenheit. Weather in Los Angeles will be mostly sunny today and tomorrow, with readings between 58 and 71 degrees. On Sunday the temperatures will rise to as much as 82-83 degrees, and next week is set for another strong heatwave with expectations of more record-breaking temperatures in the high 90s.
US inventories
Natural gas in storage in the US added 74 billion cubic feet for the week ended May 2nd, beating forecasts of a 71 bcf gain, to reach a total of 1 055 bcf. The increase is smaller than that of last week, which stood at 82 billion cubic feet. The slight slowdown is attributed to cooler weather over the East and a heatwave on the West Coast during the viewed period.
Inventories are still well below figures from previous years, after a harsh winter drained supplies. Currently they stand 43.0% short of last years reading for the regarded week, and 48.2% below 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 $4.697 per million British thermal units, it will encounter next resistance at $4.823. If broken, upside movement will probably attempt to advance to $4.891 per mBtu.
If the energy source drops below the first support level at $4.503 per mBtu, it will probably test $4.435. If the second key support zone is breached, the blue fuel’s downward movement may extend to $4.309 per mBtu.
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