Natural Gas Price Fundamental Daily Forecast – Weaker after EIA Number Comes in on High Side of Estimates

Natural gas futures are trading lower late in the session on Thursday after today’s U.S. government weekly storage report came in on the high side of expectations.

The U.S. Energy Information Administration (EIA) reported on Thursday that domestic supplies of natural gas rose by 15 billion cubic feet (Bcf) for the week ended April 23.

Total stocks now stand at 1.898 trillion cubic feet (Tcf), down 302 Bcf from a year ago and 40 Bcf below the five-year average, the government said.

At 17:32 GMT, June natural gas futures are trading $2.887, down 0.0073 or -2.47%.

Natural Gas Intelligence (NGI) reported ahead of the report, a Bloomberg survey of nine analysts produced injections estimates ranging from 6 Bcf to 19 Bcf, with a median build of 8 Bcf. Reuters polled 18 analysts, whose estimates ranged from an injection of 6 Bcf to 28 Bcf, with a median build of 9 Bcf. A Wall Street Journal poll also produced results within that range. NGI projected inventories would grow by 13 Bcf.

EIA Report Breakdown

“Now we can wait and see if the build knocks some air out of an overbought market as we approach summer…maybe short-term,” said Huntsville Utilities’ Donnie Sharp, natural gas supply manager.

NGI reported that Sharp and other participants on The Desk’s online energy chat Enelyst noted the higher-than-expected build in the South Central region. EIA said South Central inventories rose by 6 Bcf, including a 2 Bcf injection into salt stocks and 4 Bcf into nonsalts. Most analysts had pegged the build at 1-2 Bcf.

Another surprise in the latest EIA data was the 6 Bcf withdrawal in the East.

“It was much colder than normal over the interior U.S., slightly cool over the East, while warm over the West Coast,” NatGasWeather said of temperatures in the EIA report reference period.

Elsewhere, Pacific inventories rose by 7 Bcf, while Midwest stocks increased by 6 Bcf, according to the EIA. The Mountain region reported a 1 Bcf increase in stocks.

Short-Term Outlook

The main trend is up according to the daily swing chart. A trade through $2.988 will signal a resumption of the uptrend. The main trend will change to down on a move through $2.735.

The nearest support is a retracement zone at $2.868 to $2.802. This zone is also controlling the near-term direction of the market.

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