Natural gas futures added on previous gains during midday in Europe today. Yesterday the blue fuel recorded a sizable growth, supported by speculation of increasing power demand, due to the above-normal temperatures. Weather reports project more relatively warm days to follow through to next week, when a sizable peak is expected. Previously, mild weather and growing shale production made possible significant gains for US supplies recently, pressuring contracts to three consecutive weekly declines.
Front month natural gas futures, due in July, grew by 0.73% at the New York Mercantile Exchange to trade for $4.544 per million British thermal units at 11:52 GMT. Prices ranged from $4.488 to $4.547 per mBtu. Yesterday the blue fuel gained 2.41% on warmer weather over most of the US stoking power demand outlooks.
Tomorrow the US Energy Information Administration (EIA) will reveal its weekly report on natural gas inventories in the US for the week through May 23. Last Thursday, the EIA report showed that supplies of the blue fuel had added 106 billion cubic feet (bcf), exceeding expectations of 100-103 bcf growth. The figure records the biggest weekly gain since June 2013, and is 16 bcf above the 5-year average increase for the week.
However, stocks still need to recover more than 2.5 trillion cubic feet in order to restore pre-winter levels before November. This equals an average of more than 100 bcf gains each week till then, and as summer season sets in, such growth might be hard to achieve.
Shale gas production is peaking, but power demand will be inevitably growing, as air conditioners are put to work for the hot summer months ahead.
Weather report
According to AccuWeather.com New York will be quite cool today, with temperatures ranging 51 to 62 degrees Fahrenheit, several below average. Tomorrow readings will start climbing to enter average range on Friday and keep it till next week. June will make an entrance with temperature highs in the low-to-mid 80s next week, heralding the start of the hot season.
Boston will be cloudy and cooler than normal today, with temperatures ranging 44 to 53, which is 12-15 degrees below average for the day. Starting tomorrow, readings will begin climbing to be near-normal during the weekend, with temps ranging 52-65 degrees, which is still a few short of average. Next week will probably bring a sizable warm up, to mark the beginning of the Summer months.
The weather over Chicago will be sunny and normal today, with temperatures ranging 55-69 degrees, in line with averages. Tomorrow expectations project the same picture, before on Friday temperatures begin rising to range mid 60s to high 70s over the weekend.
On the West Coast, Los Angeles will be slightly warmer than usual throughout the whole week, with highs in the upper 70s and lows about 60. Up North, Seattle will be mostly cloudy with temperatures ranging high 40s to mid 60s up today and tomorrow, before sunny and warm weather during the weekend bumps readings up to a comfortable 50-75 range.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in July penetrates the first resistance level at $4.565 per million British thermal units, it will encounter next resistance at $4.618. If breached, upside movement will probably attempt to advance to $4.719 per mBtu.
If the energy source drops below its first resistance level at $4.411 per mBtu, it will see support at $4.310. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.257 per mBtu.
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