Natural Gas Price Fundamental Daily Forecast – Look for EIA to Announce Another Huge Weekly Storage Injection

Natural gas futures are inching higher after reversing earlier losses, shortly before the regular session opening at 12:00 GMT and the release of the latest government storage report at 14:30 GMT. Traders are expecting the report to show another plentiful storage injection.

In other news, spot gas prices continued to soften on Wednesday as some of the cold air that threatened to drive up short-term demand, moved on.

At 10:51 GMT, June natural gas futures are trading $1.754, up $0.006 or +0.34%.

U.S. Energy Information Administration Weekly Storage Report

Natural Gas Intelligence (NGI) reported that Energy Aspects issued a preliminary estimate for a 60 Bcf build in this week’s Energy Information Administration (EIA) storage report for the week-ending April 10.

NGI also said a Bloomberg survey showed projections ranging from 42 Bcf to 78 Bcf, with a median build of 67 Bcf. A Dow Jones poll showed estimates as low as 39 Bcf and produced an average 58 Bcf injection. NGI’s model pegged the build at 57 Bcf.

Last year, the EIA recorded a 73 Bcf build for the similar week, and the five-year average is a build of 27 Bcf.

Short-Term Weather

According to NatGasWeather for April 16 – April 22, “Cool shots will continue across the central and northern US into early next week with chilly lows of 20s and 30s. A weather system will bring rain and snow to central Plains, while a second system bringing showers to Florida. Texas and the South will warm back into the 70s and 80s into the foreseeable future, locally a touch hot into the 90s. The West will be mostly comfortable with highs of 50s to 80s for light demand. Warmer than normal conditions will build across all but the northeastern US mid-next week with national demand easing to lighter levels.”

Daily Forecast

Our daily chart points toward further weakness now that the June natural gas futures contract has crossed to the weak side of its short-term retracement zone at $1.673 to $1.719. This zone is new resistance. The next downside target is the contract and multi-year low at $1.521.

“There is simply too much gas right now, thanks to the very loose supply/demand balance caused by demand destruction with the economic shutdowns, with another loose number expected in (today’s) EIA report,” Bespoke Weather Services said.

The bears are likely to maintain control over the near-term with some expected to add to their short positions if the EIA report comes in well-above expectations. However, we’re likely to see short-covering or profit-taking if the Trump administration announces a hard date for the reopening of the economy.