Natural gas futures were to the upside during morning trade in Europe today, as investors eye the upcoming EIA weekly natgas report. A set of cooler US-bound systems were also on the radar, as early heating hype has gripped some traders.
Front-month natural gas futures for settlement in November on the New York Mercantile Exchange traded at $4.054 per million British thermal units (mBtu) at 9:21 GMT, up 0.77% for the day. Prices ranged from $4.014 to $4.059 per mBtu. The contract dropped 2.38% on Wednesday.
The main focus of investors today will be the Energy Information Administration (EIA) report, due for release at 14:30 GMT. Analysts expect a build of well over 100 billion cubic feet for the week through September 26th, highlighting the peak of Fall shoulder season. Should the injection meet expectations, it would be the twenty third straight week of above-average builds.
Analysts cautioned, however, over a possible trackback of prices going into the report, as the early cold hype could be short-lived.
“If weather patterns fail to look more intimidating going into the weekend without a bullish EIA number, there should be concerns higher prices won’t hold,” analysts at NatGasWeather.com wrote in a note to clients today. “Expect leaner weekly builds after the next two.”
A set of long-anticipated, and already well priced-in, cooler Canadian systems was on track to lower temps in highly-populated areas in the Midwest and Northeast beginning this weekend, pushing up heating outlooks.
“What’s important is the pattern is conducive to cooler than normal temperatures sweeping across the north-central US … while the West remains quite warm,” the analysts at NatGasWeather.com wrote. “It’s best to expect coming weather patterns to be cooler, but not exceptionally so.”
US temps
New York will have a rainy Wednesday, according to AccuWeather.com, with seasonal temperatures at 56-68 degrees Fahrenheit. Temps will remain little changed through Friday, before a cooler weekend. Chicago is having a stormy, though warm day today, with temps at 61-74 degrees Fahrenheit, several above average. Readings will drop some 15 degrees tomorrow and a further 10 on Saturday, for chilly weekend temp highs of about 50.
Down South, Houston will also be warmer than usual today, with temperature highs in the upper 80s, several above average. By the weekend, readings will have dropped to a comfortable few below normal with highs about 80. Over on the West Coast, Los Angeles is bracing for the first in a series of very hot days. Temps will climb to the mid 90s today, before surging several more degrees to push triple digits into the weekend, twenty above average.
Technical support and resistance levels
According to Binary Tribune’s daily analysis, November natural gas futures’ central pivot point stands at $4.075. In case the contract penetrates the first resistance level at $4.132 per million British thermal units, it will encounter next resistance at $4.242. If breached, upside movement will probably attempt to advance to $4.299 per mBtu.
If the energy source drops below its first support level at $3.965 per mBtu, it will next see support at $3.908. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $3.798 per mBtu.
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