Natural gas prices steadied below $4 during early trade in Europe today, as weather models project another overall cooler-than-normal week for the US. Investors eye Thursdays natgas storage report, with forecasts of another sizable build.
Natural gas for September traded at $3.981 per million British thermal units (mBtu) at 9:40 GMT on the NYMEX, up 0.40%. Prices ranged from $3.978 to $3.999 per mBtu. The contract added 0.08% on Monday, after a 4.3% gain last week.
Experts forecast a sixteenth straight week of bigger-than-average builds for US natural gas inventories. NatGasWeather.com suggested an injection of about 81-84 billion cubic feet will be posted on Thursdays Energy Information Administration report, which will cover the week ended August 8.
Last weeks report revealed an 82 bcf build, well ahead of the 49 t-year average.
“There are a lot of reasons to be bearish short term,” analysts at NatGasWeather.com said yesterday. “Highs of 70s over much of the Midwest and Northeast will kill cooling demand for many days. Weather patterns are quite bearish over the next 7-10 days but will then ease as warmer temperatures return.”
US weather outlook
The Midwest and Northeast see a cooler system sweeping through, bringing rains and comfortably low temperatures, NatGasWeather.com said today. Several degrees of cooling will be logged deep into the southeastern states later this week as well, easing power demand, while the Southern Plains and Texas remain quite hot, with seasonal to above-seasonal temps. Overall cooling demand for the next seven days will be low.
“While bearish weather headwinds are quite strong, they will ease late next week with much warmer temperatures finally setting up over many high use states
of the southern and eastern US,” analysts at NatGasWeather.com said in a note to clients today.
New York will be cloudy today, as temps drop to below-average, according to AccuWeather.com. Readings will range 70-79 degrees Fahrenheit, several below usual. Temps will remain low through to the weekend, with a heavy storm and rains tomorrow. Chicago remains quite cooler than normal, with temps between 57 and 69 degrees today, about 10 below average. Readings will vary through to the weekend with highs and troughs of more than 20 degrees margin, though temps will remain below average at all times.
Down South, Houston remains seasonally warm, with temperatures from 72 to 95 degrees today, a few above average. Through to next week the lows will be climbing, as sunny weather comes through. Over on the West Coast, Los Angeles will also see normal temperatures and sunny weather today and through to next week.
Technical support and resistance levels
According to Binary Tribune’s daily analysis, natgas September future’s central pivot point on the NYMEX stands at $3.966. In case the contract penetrates the first resistance level at $4.011 per million British thermal units, it will encounter next resistance at $4.056. If breached, upside movement will probably attempt to advance to $4.101 per mBtu.
If the energy source drops below its first resistance level at $3.921 per mBtu, it will see support at $3.876. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $3.831 per mBtu.
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