Yahoo Finance Natural Gas Price Fundamental Daily Forecast – Firm, but Should Have Trouble with Psychological $3.00 Level
Natural gas prices are hitting a new high for the week early Friday after the combination of a weaker than expected government storage report and a favorable weather forecast triggered a two-sided trade on Thursday. The rebound rally led to a higher close on Thursday.
At 0700 GMT, August Natural Gas is trading $2.973, up 0.0015 or +0.51%.
On Thursday, the U.S. Energy Information Administration reported that domestic supplies of natural gas rose by 96 billion cubic feet for the week-ended June 8. Traders were looking for an injection of 88 billion cubic feet.
The average over the last five years for the same week was a rise of 91 Bcf. Total stocks now stand at 1.913 trillion cubic feet, down 785 Bcf from a year ago, and 507 billion below the five-year average, the government said.
The market was supported after the initial intraday break on Thursday after hotter weather trends for later this month began to creep into the forecasts.
Weather data points towards cooler temperatures for next week into the following June 23-24 weekend, but then slightly hotter June 26-28 as the models continue to struggle on where the core of the upper ridge will set up to end June.
NatGasWeather.com forecasters said that models shifted the late June hot ridge a touch further west, while midday models turned it back a little further eastward, but still not quite hot enough over the Midwest and East. “A very warm overall pattern, but is it hot enough to take out $3?” NatGasWeather.com said.
Natural gas prices may spike higher on Friday through $2.974, but this is likely to be fueled by buy stops. I don’t think the conditions are strong enough to sustain a rally over the near-term. I also expect hedgers to come in as the market approaches the psychological $3.000 level.
We continue to expect a rangebound trade with the current supply deficit enough to provide support, but the weather still not hot enough to sustain a rally.
This article was originally posted on FX Empire
