Natural Gas Price Fundamental Daily Forecast – Traders Looking for EIA Storage Report to Show 70 Bcf Build

Natural gas futures are trading flat on Thursday as investors await the release of the government’s weekly storage report at 14:30 GMT. After a promising start to the week, the market is trading lower for the period as investors prepare for what could be the first triple-digit injection of the season.

At 12:34 GMT, June natural gas futures are trading $1.870, up 0.001 or +0.05%.

Natural Gas Intelligence (NGI) is saying that demand destruction is weighing more heavily on the front of the curve than any declines in production. Additionally, spot gas prices also were lower on relatively neutral weather patterns in the coming days. NGI’s Spot Gas National Average slipped 6.0 cents to $1.615.

Short-Term Weather Outlook

According to NatGasWeather for April 30 to May 6, “A weather system will sweep across the Great Lakes and East today with showers and slightly cool highs of 50s to 70s. The South and Southeast will be near ideal with highs of 70s to mid-80s, while the Southwest into West Texas will be hot with 90s and 100s. The rest of the U.S. will be comfortable with highs of 60s to 80s. This weekend will warm into the upper 60s to 70s from Chicago to NYC for light demand, although remaining hot over the Southwest. Cooler air will spread across much of the US next week, including deep into the southern U.S. Overall, demand will be moderate to low.”

US Energy Information Administration Weekly Storage Report

Today’s EIA storage report is expected to come in near the five-year average of 74 Bcf.

NGI reports that a Bloomberg survey of six analysts produced a range of 64 Bcf to 76 Bcf, with a median of 71 Bcf. A Reuters poll of 17 market participants had injections ranging from 59 Bcf to 80 Bcf. NGI also modeled an 80 Bcf build. Last year, the EIA recorded a 114 Bcf injection.

Daily Forecast

Today’s EIA report will set the tone of the market. Traders are looking for a large build because they believe that demand destruction is outweighing gas production constraints.

A smaller than expected number could trigger a short-covering rally into $1.932 to $1.972.

A larger than expected storage build could drive prices into at least 1.828 to 1.786. If this zone fails to stop the selling then traders will go after the last bottom at $1.765. They are going to try to take out sell stops under this level, hoping for an even steeper plunge.