Natural gas futures were little changed during early trade in Europe today. Traders await the US natural gas inventories weekly report, due later today, and forecasts project another significant gain. Meanwhile, weather over the US retains the warmer trend for the following days.
Front month natural gas futures, due in July, dropped 0.06% at the New York Mercantile Exchange to trade for $4.656 per million British thermal units at 9:31 GMT today. Prices ranged from $4.628 to $4.662 per mBtu. The contract dropped 1.06% yesterday, and so far this week the blue fuel has lost more than 1.5%.
The Energy Information Administrations (EIA) report on natural gas stockpiles for the week through June 13 is due later today, and will probably reveal a gain of about 105-110 Billion cubic feet (Bcf), NatGasWeather.com said. The injection would be 20-25 Bcf more than the 5-year average gain for the period. The above-normal temperatures will probably dent gains in the following week, with more heat at the start of July.
“A pretty dramatic warm-up is on the way,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said for Bloomberg. “The expectation that we’re going to have a cool summer is going to be challenged for the next couple of weeks.”
Power demand usually spikes during summer, as air conditioners are put to work, and power stations account for 30% of US natural gas consumption. Usually there is a direct correlation between rising summer temperatures and natural gas prices.
Weather report
NatGasWeather.com reported that Thursday will be quite hot for most of the central and eastern US, as well as the South, where humidity is also set to rise, and overall cooling demand will be moderate, with an upward trend. A cool weather system tracks out of the Rockies and will push into the Midwest and Northeast over the weekend, bringing some cool weather. The South remains in the grips of high-pressure and rising temps, with three-digit readings in many places. The western US will see mostly seasonal weather, with rising temps over the weekend.
In the 8-14 day outlook, NatGasWeather.com projects a warmer trend, with areas in the Northeast and Midwest somewhat cooler and rainy, while the South will be quite hot, bumping up air cooling. Readings will probably be climbing everywhere in late June and early July.
New York will be slightly cooler than usual today, according to AccuWeather.com. Readings will range 63-78 degrees Fahrenheit, just below average. Temps will remain relatively normal up to the weekend, when arriving western air might bring minor cooling. Boston will be warmer than usual today, ahead of slight cooling starting tomorrow. Temperatures will range 59-81 today, and 60-75 over the weekend.
Chicago is set for quite a rainy and cloudy few days, with many thunderstorms, some heavy. Readings will be above average, ranging mid 60s to upper 70s. Early next week the skies will clear and temperatures will climb. Down South, Houston will also see some stormy weather today and tomorrow, while readings remain normal, ranging 73-92. The weekend will be sunny and warmer.
Over on the West Coast, Los Angeles will see sunny weather today, with temps ranging 62-78, before readings slowly climb into the weekend. Seattle weather will also be quite normal today, temperatures between 52 and 73. The next few days will see sunny weather and varying temps, generally around the average for the season.
Technical view
According to Binary Tribune’s daily analysis , in case natural gas for settlement in July penetrates the first resistance level at $4.739 per million British thermal units, it will encounter next resistance at $4.820. If breached, upside movement will probably attempt to advance to $4.866 per mBtu.
If the energy source drops below its first resistance level at $4.612 per mBtu, it will see support at $4.566. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.485 per mBtu.
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