Natural gas futures were higher during early trade in Europe today, after a sixth session of losses on Thursday. The contract is headed for a loss of more than 6% this week, as weather over highly-populated parts of the US cooled.
Front month natural gas futures, due in August, added 0.58% at the New York Mercantile Exchange to trade for $4.144 per million British thermal units at 9:06 GMT today. Prices ranged $4.116 to $4.146 per mBtu. The contract dropped 1.20% yesterday, reaching a six-month low of $4.108 per mBtu, and so far has lost more than 6.5% this week.
The US Energy Information Administration (EIA) reported on natural gas stockpiles weekly build up on Thursday, to reveal a 93 Billion cubic feet (Bcf) gain for inventories, 21 Bcf more than the 5-year average gain for the week. NatGasWeather.com had predicted an injection of 86-92 Bcf, while a Bloomberg survey had projected 89 Bcf.
Levels remain 24.4% below readings from last year, but confidence that stockpiles will replenish completely before the start of heating season in November grows.
“The weather’s been mild and traders have been dumping their bullish gas positions,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said for Bloomberg ahead of the report. “Storage has been growing at a rapid pace week after week.”
US weather report
NatGasWeather.com reported on Friday that the cool system that brought storms and rains over the eastern US will finally be tracking offshore, allowing for rising temperatures during the weekend. However, early next week another cool blast will be moving south through the Midwest and Northeast, reaching as south as Texas, and lowering temperatures to comfortable levels. Cooling demand is expected to be moderate-to-low for the next seven days.
In the 8-14 day outlook, NatGasWeather.com projected a neutral trend for the US. A cooler Canadian system is expected to penetrate deep into the South, lowering temperatures to comfortable levels, and leaving only the extreme southern and the western parts of the US subject to above-seasonal heat. The central and eastern US will see mild cool, also lowering nat gas consumption outlooks.
According to AccuWeather.com, New York will be quite sunny and moderately warm today, with temperatures at 68-85 degrees Fahrenheit. Readings will remain relatively unchanged for the weekend, with mostly sunny weather on Saturday and a severe thunderstorm on Sunday. Next week will begin slightly warmer than usual before readings drop to below seasonal midweek. Chicago will also see partly sunny weather today, as temperatures keep between 66-79 Fahrenheit, several degrees below average. Temps will remain slightly climb for a rainy and cloudy weekend, before a significant cooling early next week.
In the South, Houston will see normal temps today, at 75-94 degrees, alongside a strong thunderstorm later in the afternoon. Readings are expected to remain relatively unchanged for the weekend, when a few thunderstorms might pass by the area. Next week will begin with steady temps, which will slowly lower as the week progresses. Over on the West Coast, Los Angeles will be cooler than normal today, with readings between 64-79 degrees. Temps will remain low tomorrow as well, before climbing to normal range on Sunday. Next week is set for more cooler-than-normal weather.
Technical view
According to Binary Tribune’s daily analysis, in case natural gas for settlement in August penetrates the first resistance level at $4.173 per million British thermal units, it will encounter next resistance at $4.225. If breached, upside movement will probably attempt to advance to $4.258 per mBtu.
If the energy source drops below its first resistance level at $4.087 per mBtu, it will see support at $4.055. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $4.003 per mBtu.
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