Natural gas futures rallied for more gains during early trading in Europe today. On Friday the blue fuel logged a sizable weekly increase, as bulls shrugged off a massive injection for US natural gas inventories.
Front month natural gas futures, due in July, added 0.64% at the New York Mercantile Exchange to trade for $4.740 per million British thermal units at 8:11 GMT. Prices ranged from $4.711 to $4.740 per mBtu, reaching a monthly high. Last week the contract gained more than 3.5%.
The EIA weekly natural gas inventories report for the week through May 30 was released last Thursday. The log revealed a 119 billion cubic feet (bcf), beating expectations of 116 bcf increase. The injection is the biggest stockpiles had received since June 2009. Stockpiles levels remain 33% below the reading from the previous year, but gradually recover.
Last week a further huge gain of 114 bcf was logged, setting the tone for more record yields throughout the summer, as suggested by the EIA.
However, as summer season sets in and temperatures rise, air conditioning will become more intense, pushing up power demand, which could hurt natural gas supplies and support price levels.
“As we get into June, cooling demand begins to pick up,” said for Bloomberg Teri Viswanath, director of commodities strategy at BNP Paribas SA in New York. “Even with the robust stock injections, the market is concerned that we are very shortly going to pass the peak of our injection season and that isn’t going to be enough.”
US weather report
According to AccuWeather.com, New York will probably experience slightly sub-seasonal temperatures throughout this whole week, with readings between 65 and 75 degrees Fahrenheit. There might be some thunderstorms and mostly cloudy days, accompanied by showers, before a sunny and warm weekend. Up North on the East Coast, Boston will also see relatively cooler weather this week, though today readings will be a few above average. The weekend will also be warm and sunny for Boston, with temperatures reaching into the high 70s.
Chicago will be cool and cloudy over the following days, with a strong possibility of severe thunderstorms tomorrow and on Wednesday. Temperatures will reach no higher than 70 degrees. Starting on Thursday, the clouds will clear and it will be mostly sunny, though still cooler than normal.
Over on the West Cost, Los Angeles will be warmer than usual today and tomorrow, with readings reaching above 80, a few more than normal. On Wednesday and after it will be slightly cooler, with temperatures ranging 60 to mid 70s, a couple degrees below average. Up North, Seattle will see mostly seasonal weather, with mixed in sunny and cloudy days. Temperatures will keep close to normal, largely between 50 and 70 Fahrenheit.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in July penetrates the first resistance level at $4.738 per million British thermal units, it will encounter next resistance at $4.765. If breached, upside movement will probably attempt to advance to $4.795 per mBtu.
If the energy source drops below its first resistance level at $4.681 per mBtu, it will see support at $4.651. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.624 per mBtu.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
