Natural gas futures were slightly lower during early trade in Europe today, after a slump over the previous two sessions. A cooler pattern over top-consumer US lowered power demand prospects, pressuring the blue fuel. The US Energy Information Administration (EIA) will post the weekly report on gas inventories tomorrow, and analysts expect further sizable gains.
Front month natural gas futures, due in July, dropped 0.13% at the New York Mercantile Exchange to trade for $4.524 per million British thermal units at 8:58 GMT. Prices ranged from $4.523 to $4.554 per mBtu. Yesterday the contract dropped 2.48%, after a further 1.38% loss on Monday, though it did reach a monthly high at $4.743 per mBtu.
“There’s not a lot of extreme weather,” Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami, said for Bloomberg. “That’s maybe causing the market to dip down.”
The US, which consume 21% of all natural gas, will report natgas stockpiles levels tomorrow. Inventories probably expanded by 114 billion cubic feet for the week through June 6, Tim Evans, energy analyst at Citi Futures in New York, wrote in note to clients today, cited by Bloomberg. Another survey by Bloomberg suggested a 109 bcf gain.
Previously, last week’s 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.
The EIA raised its inventories levels forecast through November, when heating demand usually picks up, to 3.424 trillion cubic feet, which would be more then enough to cover a harsh winter.
US weather report
According to AccuWeather.com, New York will be cloudy and cooler than usual today, with readings between 63 and 70 degrees Fahrenheit, several below average. Tomorrow will also be cloudy and rainy, though slightly warmer, before a further warm up on Friday and into the weekend. However, thunderstorms and rains will persist through to Saturday. Up North on the East Coast, Boston is also set for a cooler day, though mostly sunny. Temperatures will be below normal, ranging 57-67. Tomorrow will also be cooler, before on Friday readings normalize again, though a severe thunderstorm is expected.
Chicago will be cool, cloudy and rainy today, with temperatures ranging 57-65 Fahrenheit, several below normal. Starting tomorrow, the clouds will clear and it will be mostly sunny for the rest of the week, with near-normal readings.
Over on the West Cost, Los Angeles will be sunny today, with normal temperatures between 60 and 73 degrees Fahrenheit, a few below average. The weather will probably remain such for the rest of the week. Up North, Seattle will be warm and sunny today, with readings ranging 52-73, a few above usual. Tomorrow temperatures will begin dropping and it will be mostly cloudy and rainy for the rest of the week, with readings several degrees below normal.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in July penetrates the first resistance level at $4.604 per million British thermal units, it will encounter next resistance at $4.678. If breached, upside movement will probably attempt to advance to $4.720 per mBtu.
If the energy source drops below its first resistance level at $4.488 per mBtu, it will see support at $4.446. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.372 per mBtu.
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