Natural gas futures were higher during morning trade in Europe today, ahead of the weekly US gas inventories levels report. Analysts expect another sizable injection, after a cooler pattern over the US lowered power demand outlooks, and power plants account for 30% of US consumption.
Front month natural gas futures, due in July, added 0.44% at the New York Mercantile Exchange to trade for $4.528 per million British thermal units at 9:08 GMT. Prices ranged from $4.520 to $4.534 per mBtu. Yesterday the contract dropped 0.49%, and so far this week natural gas futures have lost more than 4%.
“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 reveal natgas stockpiles levels today, as the Energy Information Administration (EIA) posts its weekly report for the seven days through June 6. Inventories probably expanded by 114 billion cubic feet, Tim Evans, energy analyst at Citi Futures in New York, wrote in note to clients yesterday, 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, and a couple of showers. A nice warming is expected for Friday, though accompanied with severe thunderstorms and rains, before a sunny and warm weekend. Up North on the East Coast, Boston is also set for a cooler day, with variable clouds and showers. Temperatures will be below normal, ranging 60-70. Tomorrow will also be cooler, with a severe thunderstorm, before on Saturday readings climb for a warmer-than-usual weekend.
Chicago will be mostly sunny today, with temperatures ranging 54-77 Fahrenheit, a few below average. The rest of the week will also be sunny, though slightly cooler than normal.
Over on the West Cost, Los Angeles will be sunny today, with temperatures between 60 and 73 degrees Fahrenheit, a few below average. The weather will probably remain such for the rest of the week, with only slightly higher temps. Up North, Seattle will be cloudy today, with some showers and a possible thunderstorm. Temperatures will be normal, ranging 52-68. Tomorrow readings will drop to several below average and it will be cooler and cloudy for the rest of the week.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in July penetrates the first resistance level at $4.553 per million British thermal units, it will encounter next resistance at $4.597. If breached, upside movement will probably attempt to advance to $4.622 per mBtu.
If the energy source drops below its first resistance level at $4.484 per mBtu, it will see support at $4.459. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.415 per mBtu.
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