Natural Gas Price Fundamental Daily Forecast – Facing Resistance at $8.00 After Bullish EIA Storage Injection

Natural Gas futures are inching higher shortly after the release of the government’s weekly storage report. The inventory data is expected to shed some light on how scorching heat has impacted supply balances.

At 15:11 GMT, September natural gas futures are trading $7.962, up 0.063 or 0.80%. The United States Natural Gas Fund ETF (UNG) is at $26.60, down $0.18 or -0.67%.

Energy Information Administration Weekly Storage Report

Ahead of the report, traders were pricing in an injection in the mid to upper 40s Bcf for the week-ended July 15.

Natural Gas Intelligence (NGI) reported a Bloomberg poll showed a median 43 Bcf injection based on 14 estimates ranging from 34 Bcf to 59 Bcf. A Reuters’ survey produced injection estimates that spanned 36 Bcf to 59 Bcf. It landed at a median of 48 Bcf. A Wall Street Journal poll found an average injection expectation of 48 Bcf and generated a range of 39 Bcf to 59 Bcf.

The estimates compare with a year-earlier build of 50 Bcf and a five-year average injection of 41 Bcf. For the week-earlier period EIA reported a 58 Bcf injection.

Total Lower 48 natural gas inventories stood at 2,369 Bcf as of July 8, a 319 Bcf (minus 11.9%) deficit versus the five-year average.

Short-Term Weather Forecast

According to NatGasWeather for July 21-27, “Hot high pressure will rule nearly the entire U.S. the next 7-days with highs of 90s to 100s for very strong national demand besides 80s near the Canadian border.

Temperatures will be hottest from California to Texas, and across the Great Plains with highs of upper 90s to 110 Fahrenheit, while also hot with highs of 90s over major East Coast cities.

Overall, strong to very strong national demand.”

Daily Forecast

Breaking News: The EIA reported a potentially bullish build of 32 Bcf.

Technically speaking, the key area buyers are going to attack is the short-term Fibonacci level at $7.965 and the psychological $8.00 level. The latter is a potential trigger point for an acceleration to the upside.

In order to fuel a breakout over $8.00, however, the weather forecasts are going to have to start showing the heat extending into early August.