Natural gas futures were lower during early trade in Europe today, after a significant gain on Thursday, when the US EIA posted its weekly reading on nat gas inventories. Weather patterns project more moderate weather for the US in the mid term.
Front month natural gas futures, due in August, dropped 0.59% at the New York Mercantile Exchange to trade for $4.380 per million British thermal units at 8:48 GMT today. Prices ranged from $4.402 to $4.379 per mBtu. The contract added 1.12% yesterday, reaching a monthly low of $4.329 per mBtu, and erasing losses from earlier this week.
The US Energy Information Administration (EIA) posted its weekly reading on natural gas inventories for the seven days ended June 27 yesterday. Stocks were shown to have added 100 Billion cubic feet (Bcf), 22 Bcf more than the 5-year average gain for the week. NatGasWeather.com had predicted a gain of 99-103 Bcf.
Total gas held in underground storage hubs is still 25.7% lower than last year’s levels during the comparable period. However, the EIA has suggested gains will continue to be above-average, and that most likely inventories will be completely replenished ahead of winter heating season.
US weather report
NatGasWeather.com reported on Thursday, that the high pressure build-up over much of the western and southern US will keep temperatures relatively high, reaching above 100 in many places. A cooler weather system will track through the Midwest and Northeast, bringing showers and clouds and dragging readings down a few degrees, before another surge on high pressure later in the seven-day period. Tropical Cyclone Arthur remains impressive and could drive some market fear, though the high pressure over the Midwest should push the storm offshore. Cooling demand is projected to be moderate-to-high.
In the 8-14 day outlook, NatGasWeather.com projects a neutral trend for the US, with an upward bias. The southern and central, as well as the western states will be relatively warm for the whole period, with the northern and eastern states experiencing some cool early on, though following suit with heat soon after. Thunderstorms will increase over the South and Southwest as the monsoon season begins due to hot temperatures and high humidities.
New York will be cloudy and will see a few strong thunderstorms today, with readings ranging 62-77 degrees Fahrenheit, some 10 degrees below average. Temperatures will climb to usual for a nice and sunny weather, with highs in the low-to-mid 80s. Chicago will be sunny, though chilly today, with readings about 10 degrees below average, at 60-75 degrees. The weekend will see plenty of sun and rising, though still below normal with highs in the upper 70s.
Down South, Houston will see mostly cloudy, though warm weather today, with temperatures between 72 and 91 Fahrenheit, normal for the day. A PM thunderstorm is expected in the area. The weekend is expected to also bring normal temps and plenty sun. Over on the West Coast, Los Angeles will be slightly warmer today, with readings a few above average at 67-85 degrees. Temps will remain as they are over the following days for a sunny and moderately-warm weekend.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in August penetrates the first resistance level at $4.435 per million British thermal units, it will encounter next resistance at $4.464. If breached, upside movement will probably attempt to advance to $4.517 per mBtu.
If the energy source drops below its first resistance level at $4.353 per mBtu, it will see support at $4.300. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.271 per mBtu.
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