Natural Gas Price Fundamental Daily Forecast – EIA Report Will Set Tone Today, Traders Looking for 76 Bcf Draw

Natural gas futures are lower in limited trading as investors await the U.S. Energy Information Administration weekly storage report. The market is trading inside yesterday’s wide range which suggests investor indecision and impending volatility. Traders are also holding prices tight due to inconsistency in the current weather forecasts. Some reports are calling for cold temperatures to return at mid-month. Others are looking for mild temperatures.

At 1300 GMT, January Natural Gas futures are trading $4.609, down $0.090 or -1.92%.

On Wednesday, natural gas rallied in conjunction with the expiration of the December futures contract. Buyers also resurfaced when new forecasts pointed to colder medium-range temperatures that could encourage new longs to enter. Aggressive short-covering could also generate further upside action.

Natural Gas Intelligence said that Bespoke Weather Services attributed some of the gains earlier Wednesday to overnight weather data that had increased heating demand expectations and strong prices in the physical market.

Forecast

The direction of the January Natural Gas futures contract on Thursday is likely to be primarily determined by today’s EIA weekly storage report, due out at 1530 GMT. Traders are expecting a larger-than-average withdrawal for the week-ended November 23.

Reuters is estimating an average 77 Bcf pull for the week, with a range of minus 62 Bcf to minus 105 Bcf. Bloomberg is predicting a median withdrawal of 82 Bcf, with estimates ranging from minus 60 Bcf to minus 88 Bcf. The ICE EIA financial weekly index futures settled Tuesday at a withdrawal of 65 Bcf. Energy Aspects issued a preliminary estimate for a 63 Bcf pull from U.S. gas stocks for this week’s report.

Last year, the EIA recorded a 35 Bcf withdrawal for the period, and the five-year average is a withdrawal of 49 Bcf.

As far as the weather is concerned, investors are focusing on December 10 as the make or break date. The services are debating at this time whether temperatures turn colder after this date, or milder.