Natural Gas

Natural Gas Price Fundamental Daily Forecast – Traders Looking for EIA Storage Report to Show 32 Bcf Build

Natural gas futures are trading slightly lower and in a tight range shortly after the regular session opening as investors await the release of the U.S. Energy Information Administration weekly storage report at 14:30 GMT. With weather forecasts mixed at this time, the report is likely to set the tone for the rest of the session.

At 12:19 GMT, June natural gas futures are trading $2.733, down 0.009 or -0.33%.

The price action this week can best be described as sideways. It reflects similar movement in the weather forecasts and cash markets. As far as the weather is concerned, we’ve seen a mix cold air blasts offset by milder temperatures. Natural Gas Intelligence said the cash market has experienced, “large upswings in some unexpected regions and deep sell-off in New England.”

Furthermore, “Weather models have been rather inconsistent in recent runs, although overall, data reflects an active but not quite cold enough pattern for the second half of April, according to NatGasWeather.

Natural Gas
Daily June Natural Gas

Short-Term Weather Outlook

According to NatGasWeather.com for April 11 to April 17, “A strong spring storm with heavy rain and snow will track across the Midwest today with chilly conditions behind the cold front where lows will drop into the 20s and 30s. The southern US will be very warm to locally hot with highs of 70s to 90s, while mild over the West Coast with mostly 50s to 70s, coolest over the wetter Northwest. Another cool shot will sweep across the northern and central US Saturday – Tuesday with lows of 20s and 30s for stronger national demand, then warming late next week. Overall, national demand will be increasing to moderate-high.”

EIA Storage Report Estimates

Forecasts for today’s EIA weekly storage report point to an injection in the low 30 Bcf range. This compares with last year’s 20 Bcf withdrawal and the five-year average injection of 5 Bcf.

Bloomberg analysts have issued estimates ranging from 7 Bcf build to a 47 Bcf build, with a median of 33 Bcf. National Gas Intelligence projects a 29 Bcf injection.

Daily Forecast

Combined with the weather forecasts and the cash market action, a storage number coming in as expected is likely to mean more sideways price action over the short-term. This means prices could sit inside the $2.675 to $2.768 range while straddling its retracement zone at $2.721 to $2.710.

A bullish report could drive prices through $2.768 with $2.808 a potential upside target. A bearish report will likely drive prices through $2.710 and into main bottoms at $2.675 and $2.647.

Looking ahead to next week’s EIA report, some analysts are predicting a 100 Bcf-plus build. This is why traders should treat every rally as a new shorting opportunity.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.