Natural gas futures were lower during early trade in Europe today. Thursday saw a massive gain for blue fuel contracts, after the US Energy Information Administration (EIA) revealed inventories levels had climbed slightly less than expected.
Front month natural gas futures, due in July, dropped 0.44% at the New York Mercantile Exchange to trade for $4.741 per million British thermal units at 8:45 GMT. Prices ranged from $4.740 to $4.793 per mBtu, reaching a monthly high. Yesterday the contract added 5.63%, the biggest daily gain in four months, and so far this week natural gas futures have gained about 1.5%.
“Natural gas traders are prone to stampede; this is a very one-directional trade so there were not a lot of people selling into this rally to slow it down,” Tim Evans, energy analyst at Citi Futures in New York, said for Bloomberg. “We’ve had eight consecutive weeks with storage injections above the five-year average and the only bullish argument over this eight-week span is that it’s still not enough.”
The EIA posted its report on US natural gas inventories for the week through June 6 yesterday. The log revealed stockpiles had added 107 billion cubic feet (bcf). A Bloomberg survey had suggested a 109-bcf gain.
Previously, last week’s log revealed a gain of 119 billion cubic feet (bcf), beating expectations of a 116-bcf increase. The injection was the biggest stockpiles had received since June 2009. However, inventory levels remain 31% below readings from last year, but gradually recover.
“Demand has been solid, supply is solid, but with the deficit that we have, we need to have 110s and 115s,” said for Bloomberg Kyle Cooper, director of research with IAF Advisors in Houston.
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, though warm today, with readings between 65 and 78 degrees Fahrenheit, in line with the average. A severe thunderstorm will probably pass in the afternoon. Over the weekend and into next week temperatures will climb to several above usual, reaching mid 80s, as sunny and pleasant weather heralds the arrival of Summer. Up North on the East Coast, Boston is also set for a cooler day and drenching rains. Temperatures will be below normal, ranging 63-66. The weekend will see normal temperatures and clearing skies, before next week arrives with rising temps.
Chicago will be mostly sunny today, with temperatures ranging 53-69 Fahrenheit, several below average. The weekend will bring climbing readings, which will top 80 on Sunday. Next week will also be warmer, though some thunderstorms might make an appearance.
Over on the West Cost, Los Angeles will be sunny today, with temperatures between 59 and 74 degrees Fahrenheit, a few below average. The weather will probably remain such for the weekend and early next week, with only slightly higher temps, before a more significant warm up in the second half of next week. Up North, Seattle will be cloudy and cool today, with little-to-moderate rains. Temperatures will be below average, ranging 51-61. The weekend and Monday will also be cooler and cloudy, before sunny and warm weather arrives, starting Tuesday next week.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in July penetrates the first resistance level at $4.847 per million British thermal units, it will encounter next resistance at $4.933. If breached, upside movement will probably attempt to advance to $5.096 per mBtu.
If the energy source drops below its first resistance level at $4.598 per mBtu, it will see support at $4.435. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.349 per mBtu.
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