Natural Gas

Natural Gas Price Fundamental Daily Forecast – Will EIA Report Trigger Move to $3.00 or $2.86 Today?

Natural gas futures are trading lower early Thursday, shortly before the regular session opening and well ahead of the government storage report at 1430 GMT. Prices have drifted sideways for two days since spiking to the upside on Monday.

At 0951 GMT, October Natural Gas futures are trading $2.939, down $0.009 or -0.31%.

Helping to support the market ahead of the report is a lingering storage deficit and strong power burn demand which has been helping to limit weekly injections. Record production has been limiting gains somewhat.

Storage Deficit

The Northeast is being plagued by the storage deficit. Total Northeast inventories currently stand at 676 Bcf, a deficit of approximately 105 Bcf to the five-year average, according to Platts Analytics.

Production

Platts Analytics said that U.S. dry gas production fell 1 Bcf/d day on day to 80.8 Bcf/d Wednesday, and is projected to average 81.3 Bcf/d for the next two weeks as dry production continues to stay strong into the foreseeable future.

Power Burn

The power burn increased 100 MMcf/d day on day to 37.7 Bcf/d, as power burn is expected to increase through the week with temperatures rising for all regions excluding the Northeast, Platts Analytics data showed.

Short-Term Weather Forecast

According to the National Weather Service, the most recent six- to 10-day temperature forecast calls for warmer-than-average temperatures for much of the Southwest and Pacific Northwest.

Forecast

Today’s U.S. Energy Information Administration’s (EIA) weekly storage report is expected to show a 30 Bcf build for the week-ended August 10.

There’s a lot at stake today because a bullish report today could launch a spike to the upside with targets coming in at $2.995 and $3.025.

While a bearish report could send prices plunging through the bottom at $2.905. This will change the trend to down and if it generates enough downside momentum, prices could continue to plunge to at least $2.865 to $2.838.

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.