Natural Gas Price Fundamental Daily Forecast – EIA Reports Slightly Higher-Than-Expected Build

Natural gas futures are edging higher shortly before the release of the U.S. government’s weekly storage report at 14:30 GMT. The weather outlook and the LNG export news continue to come in positive, but the fundamentals remain unchanged from earlier in the week, which suggests today’s government report could be a market moving event.

At 14:19 GMT, September natural gas is trading $2.257, up 0.066 or +3.01%.

U.S. Energy Information Administration Weekly Storage Report

Traders expect today’s EIA weekly storage report to come in at about 31 Bcf. This is higher than last week’s 25 Bcf figure. Ahead of the report, inventory stands at 3,241 Bcf. A year ago, this figure was 2,615 Bcf and the five-year average is 2,812 Bcf.

According to Natural Gas Intelligence (NGI), the latest round of EIA data covering the week ending July 31 is expected to show another 28-33 build.

Bloomberg analysts are looking for a median build of 30 Bcf. Reuters analysts predict the same. A Wall Street Journal poll averaged 31 Bcf and NGI projects a 30 Bcf build. Last year’s figure for this week was a 58 Bcf build, while the five-year average is at 33 Bcf.

Short-Term Weather Outlook

According to NatGasWeather for August 6 -12, “An unseasonably cool air mass continues to bring comfortable highs of 70s to lower 80s from the Midwest to Northeast for light national demand. Regionally hot conditions continue across the West and southern U.S. with highs of 90s to 100s.

Very warm conditions will push into the central and northern U.S. this weekend with highs of upper 80s and lower 90s from Chicago to New York City, while hot most elsewhere besides Northwest, increasing national demand to strong levels.”

Daily Forecast

In breaking news, the EIA weekly storage report showed a build of 33 Bcf. This is slightly bearish news because it came in at the top of the range.

The main trend is up according to the daily swing chart. Look for the bullish bias to continue as long at September natural gas futures hold above the key retracement zone at $2.149 to $2.041.

If the upside momentum continues then the next major target will be the May 5 top at $2.499.

Falling below 2.149 will be the first sign of weakness. Holding inside $2.149 to $2.041 will indicate a neutral state. Taking out 2.041 will signal that the selling is greater than the buying at current price levels.

For a look at all of today’s economic events, check out our economic calendar.