Natural gas trading outlook: futures steady after significant losses, US inventories data ahead

Natural gas futures made slight gains during early trading in Europe today, after sliding more than 10% recently as the colder season in the US is coming to an end. Expectations of more sizable gains for stockpiles in the US kept pressure on the fuel. Weather forecasts paint a contrasting picture for the US, as regions of the Midwest and Northeast will be cooler, while the West Coast is pushing all-time highs.

Front month natural gas futures, due in June, added 0.25% at the New York Mercantile Exchange to trade for $4.369 per million British thermal units at 9:43 GMT. Prices ranged from $4.357 to $4.377 per mBtu. Yesterday the contract lost 1.71%, reaching the lowest level in a month, and over the last 10 days the blue fuel dropped 10.67%.

Weather reports project a stormy few days for the Northeast, with showers and thunderstorms. Over the second half of the week the strong storm will be moving through, bringing more heavy rains and possibly floods. The Midwest will see various patterns over the following days. The weakening storm will still make possible thunderstorm and locally heavy rains. The Northern Plains will be chilly, while Ohio, Kentucky and east Indiana will be warmer. The West Coast is enduring a heatwave this week, with temperatures highs close to the 100 mark. Windy conditions in California will be increasing the fire hazard to dangerous levels.

According to AccuWeather.com New Yorks readings will range 60-67 degrees Fahrenheit today, largely in line with the average. Temperatures will rise over the next few days, however there will be some thunderstorms and rains. Chicago will also be rainy and cloudy, readings will range 42-55 over the next few days, about 10 degrees below average. Los Angeles will be very hot, with forecasts of over 100 degree highs for today and tomorrow. On Friday temperatures will start lowering to enter average range at 55-75 next week.

The Energy Information Administration will release its weekly report on natural gas storage levels for the week through May 9th on Thursday. Expectations of sizable gains due to milder weather over most of the US during the observed period pressured blue fuel contracts to drop more than 10% recently.

Technical view

According to Binary Tribune’s daily analysis, in case natural gas for settlement in June penetrates the first resistance level at $4.436 per million British thermal units, it will encounter next resistance at $4.513. If breached, upside movement will probably attempt to advance to $4.558 per mBtu.

If the energy source drops below its first resistance level at $4.314 per mBtu, it will see support at $4.269. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.192 per mBtu.