Natural gas futures traded higher during early hours in Europe today, ahead of the US Energy Information Administration (EIA) weekly report on gas inventories. The US consumes more than 20% of all natural gas, and stockpiles in the country are a dominant factor for futures prices. Analysts expect another huge gain for supplies, which could pressure contracts. Weather forecasts project a generally warmer US over the next few days.
Front month natural gas futures, due in July, added 0.80% at the New York Mercantile Exchange to trade for $4.677 per million British thermal units at 9:26 GMT. Prices ranged from $4.633 to $4.681 per mBtu, reaching a monthly high. Yesterday the contract added 0.24%, and so far for the week the blue fuel has gained over 2%.
The EIA weekly natural gas inventories report is due later today. Experts suggest a 116 billion cubic feet (bcf) were added to stockpiles, for the highest injection since June 2009. Last week a further 114 bcf were gained, setting the tone for more record yields, boosted by shale output, throughout the summer, as predicted by the EIA.
However, as summer season sets in, air conditioning will become more intense, pushing up power demand, which could hurt natgas supplies.
US weather report
According to AccuWeather.com, New York is set for cloudy day, with temperatures ranging 59-72 degrees Fahrenheit, a couple below average. Tomorrow readings will climb several degrees, accompanied by sunny and pleasant weather. During the weekend temps will be several degrees above average, pushing highs into the low-to-mid 80s.
Boston will be quite cooler than normal today, with temperatures in the range of 54-62, about 10 below average. Moderate rains and fogs are expected, with a possible thunderstorm. On Friday the skies will start clearing and readings will rise, for a very warm and sunny weekend, with temperatures up to 80 degrees, several above usual.
Chicago is set for a sunny and pleasant day, though temps will be a few below usual, ranging 54-71. Tomorrow readings will climb a few degrees to be on par with the average. The weekend will probably bring some thunderstorms and Sunday will be significantly cooler, with temps 10 below usual.
Over on the West Coast, Los Angeles will have normal temperatures today and tomorrow, with highs in the upper 70s and lows about 60, before a slight warm up for the weekend, with readings several above average. Up North, Seattle will be quite sunny today, temps between 50 and 70. The rest of the week is projected to be quite similar, with plenty of sun and readings a few above average.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in July penetrates the first resistance level at $4.670 per million British thermal units, it will encounter next resistance at $4.700. If breached, upside movement will probably attempt to advance to $4.747 per mBtu.
If the energy source drops below its first resistance level at $4.593 per mBtu, it will see support at $4.546. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.516 per mBtu.
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