Natural Gas Price Fundamental Daily Forecast – EIA Report Expected to Show Net Injection in Upper 40s Range

Natural gas futures are trading lower shortly before the release of this week’s government storage report. The market is also hovering slightly above the low end of a short-term technical support area. Taking out this area could trigger an acceleration to the downside.

This notion is also being supported on the fundamental side with traders looking for this week’s report to show a much larger injection week/week.

At 13:33 GMT, September natural gas futures are trading $4.007, down $0.052 or -1.28%.

Energy Information Administration Weekly Storage Report

Today’s EIA weekly storage report for the week-ending August 6, is expected to show a net injection in the upper 40’s range with a consensus of 47. This is up substantially from last week’s 13 Bcf build.

Natural Gas Intelligence (NGI) reported ahead of the report that a Bloomberg survey of nine analysts produced a range of injection estimates from 38 Bcf to 58 Bcf, with a median build of 47 Bcf. Reuters polled 16 analysts, whose estimates were in a tighter range and had a median injection of 49 Bcf.

NGI modeled a 53 Bcf build for the upcoming report, which covers changes during the week-ended August 6. Last year, the EIA recorded a 55 Bcf build for the similar week, while the five-year average is an injection of 42 Bcf.

Short-Term Weather Outlook

In its latest forecast, NatGasWeather observed mixed changes in the major weather models overnight, including a small increase in degree days from the American model and small decrease in the European model.

“No major changes, with strong national demand through Saturday as widespread heat continues across the U.S. with highs of 90s and 100s, including mid-90s over the East Coast and 90s and 100s for Seattle and Portland,” NatGasWeather said. “But again, while U.S. heat is as impressive as it’s been all summer, national demand is below the summer peak due to strong winds over Texas and the Plains” that have driven higher renewable generation and cut into gas power burns.

Daily Forecast

Looking ahead to the report, a surprise jump over 50 Bcf could spike prices lower. This move could be of interest for the bullish traders since they have been stepping in on price dips all summer.

Technically, the key area to watch is the short-term retracement zone at $4.021 to $3.978.

Look for an upside bias to develop on a sustained move over $4.021. The first upside target is a minor pivot at $4.092.

On the downside, taking out $3.978 will be a sign of weakness. This could trigger an acceleration into a support cluster at $3.850 to $3.837.