Natural gas futures were largely unchanged during early trading in Europe today. Over the previous three days the blue fuel gained almost 5%, as investors bet power demand will be surging in the US amid summer temperatures forecasts. The US governments weekly report on natgas supplies is due later today, while weather reports project more warm days to follow through to next week, when a sizable peak is expected.
Front month natural gas futures, due in July, grew by 0.17% at the New York Mercantile Exchange to trade for $4.623 per million British thermal units at 9:01 GMT. Prices ranged from $4.606 to $4.630 per mBtu, reaching the highest level in three weeks. Yesterday the blue fuel gained 2.31%, and so far this week the contract has added 4.72%, as power demand outlooks in top-consumer US are on the rise.
Later today the Energy Information Administration (EIA) will post its weekly report on natural gas inventories in the US for the week through May 23. Experts estimate and increase of 110 billion cubic feet (bcf) is probable, which would be the biggest injection since June 2013. The average gain for the week is 93 bcf.
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 mostly sunny, but cool today, with temperatures ranging 55 to 67 degrees Fahrenheit, several below average. Tomorrow readings will start to climb 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 also be sunny and cooler than normal today, with temperatures ranging 49 to 62, several below the average for the day. Tomorrow readings will grow to be near-normal. During the weekend temps will range low 50s to upper 60s, 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, like on the East Coast, sunny, though cool today, with temperatures ranging 56-69 degrees, just below usual readings for the day. On Friday temperatures will begin rising to range mid 60s to high 70s over the weekend and into next week.
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 today, before sunny and warm weather on Friday and 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 $4.665 per million British thermal units, it will encounter next resistance at $4.716. If breached, upside movement will probably attempt to advance to $4.804 per mBtu.
If the energy source drops below its first resistance level at $4.526 per mBtu, it will see support at $4.438. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.387 per mBtu.
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