Natural gas futures were lower during early trade in Europe today. Traders expect another sizable injection for US inventories be revealed this week, while July 4 will probably allow for big gains next week as well.
Front month natural gas futures, due in August, dropped 0.81% at the New York Mercantile Exchange to trade for $4.425 per million British thermal units at 11:54 GMT today. Prices ranged from $4.456 to $4.406 per mBtu. The contract added 1.18% on Monday, after having dropped about 3% last week, when a monthly low at $4.375 per mBtu was reached.
“As we get close to July and August, the peak-demand months, we should expect some heat,” Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami, said for Bloomberg. “We sold off pretty hard last week after another triple-digit injection. We will see what July brings, but we are going to have another triple-digit this week and we will probably have another one the following week because the Fourth of July.”
US weather report
NatGasWeather.com reported on Monday that the US will see high pressure building up over the Midwest and Northeast, allowing for rising temperatures, which will reach into the 90s. A cooler system is moving eastwards through the Rockies, but will hardly impact readings as high pressure over the northern Plains will dampen much of its potency. Overall cooling demand will probably remain moderate-to-high.
In the 8-14 day outlook, NatGasWeather.com projects a warmer trend for the US. The high pressure over the southern US will expand into the North, lifting temperatures. The southern, western and central US will see widespread triple-digit readings. The northern states will see a couple of cooler systems push in, though a significant cooling is not expected.
New York will see mostly sunny weather today, with readings ranging 74-88 degrees Fahrenheit, several above average. Tomorrow will also be quite warm, though a few storms are expected later on. Clouds and rains will dominate the latter half of this workweek, including a cool July 4. Chicago weather will be partly cloudy today and temperatures will be just below normal, at 61-82 Fahrenheit. Readings will drop to some 15 degrees tomorrow, but will start to slowly climb later in the week. July 4 will still be quite cooler than normal, with highs in the mid 70s.
Down South, Houston will see sunny and warm weather this week. Throughout the following days temperatures will range mid-70s to mid-90s, a few degrees above usual. Over on the West Coast, will also have a sunny week. Readings will be a few below average at 63-77 degrees today and tomorrow, but will slowly climb throughout the rest of the week.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in August penetrates the first resistance level at $4.510 per million British thermal units, it will encounter next resistance at $4.559. If breached, upside movement will probably attempt to advance to $4.625 per mBtu.
If the energy source drops below its first resistance level at $4.395 per mBtu, it will see support at $4.329. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.280 per mBtu.
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