Yahoo Finanza Natural Gas Price Fundamental Daily Forecast – EIA Expected to Report Injection Slightly Below 5-Year Average
Natural gas futures are edging lower shortly before the release of the government’s weekly storage report at 14:30 GMT. The report is expected to show a build that is slightly below the 5-year average.
The early weakness could be a reaction to overnight comments from the European Commission on Thursday that said gas supply is not at risk from a Ukraine transit issue.
If you recall, Ukraine announced on Tuesday that it would suspend the flow of gas through a transit point bringing Russian fuel to Europe. Traders saw this as a bullish sign. However, earlier today, the EU said it does not present a gas supply issue. Instead, it blamed Moscow for the disruption.
At 10:19 GMT, June natural gas futures are trading $7.311, down $0.329 or -4.31%. On Wednesday, the United States Natural Gas Fund ETF (UNG) settled at $26.37, up $1.58 or +6.37%.
Wednesday’s Recap
U.S. natural gas futures gained about 4% on Wednesday on a big drop in daily output over the past three days and forecasts for more demand this week than previously expected. The shutdown of a pipeline carrying Russian gas through Ukraine also helped support U.S. gas futures by temporarily lifting European prices.
Short-Term Weather Outlook
According to NatGasWeather for May 12-18, “Texas and the South Plains remain very warm to hot with highs of 80s and 90s, while the West into the Northern Plains remains mild & unsettled as weather systems track through.
It’s also warm from the Southern Great Lakes to the South as high pressure rules with highs of 80s to lower 90s.
The East will be nice with 70s and 80s despite a weather system off the coast that’s slowly tracking into the Southeast with showers.
For late this week through mid-next week, the northern U.S. will be comfortable with highs of 60s and 70s as late season weather systems track through, while the southern U.S. remains very warm to hot with highs of 80s and 90s, besides 100s in the Southwest deserts into West Texas.”
US Energy Information Administration Weekly Storage Report
According to survey averages, today’s EIA storage report is expected to show an injection of 80 Bcf for the week-ending May 6. This is slightly below the 5-year average of 82 Bcf.
Natural Gas Intelligence (NGI) is reporting that analysts are expecting an injection in the low 80s Bcf. Bloomberg’s survey showed estimates of 64 Bcf to 85 Bcf, with a median of 81 Bcf.
Last year the report showed an injection of 70 Bcf during the same week last year and a five-year average increase of 82 Bcf.
Short-Term Outlook
June natural gas futures are currently trading between retracement zone resistance at $7.713 to $8.016 and retracement zone support at $6.779 to $6.256.
Since the longer-term trend is up and expected to be supported by strong fundamentals, we’re looking for bullish traders to continue to support the market on breaks back into support.
On the upside, a sustained move over $8.016 could bring in aggressive traders willing to buy strength.
Excessive heat over the next two weeks will make it difficult to close the current storage deficit even if output increases. This is supportive for higher prices.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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