Natural gas futures seemed headed for another volatile session Thursday, rallying in early trading ahead of the latest round of government inventory data. The August Nymex contract was up 10.0 cents to $3.750/MMBtu at around 8:50 a.m. ET.
Estimates ahead of this week’s Energy Information Administration (EIA) storage report, scheduled for 10:30 a.m. ET, have been close to the five-year average injection of 65 Bcf and last year’s 73 Bcf build.
A Bloomberg survey of 11 analysts produced a range of estimates from 59 Bcf to 75 Bcf, with a median of 68 Bcf. Reuters polled 18 analysts, whose estimates were as low as 55 Bcf and had a median injection of 68 Bcf. NGI modeled a 67 Bcf build for the upcoming report, which covers the week ended June 25.
“It was hotter than normal over the western half of the U.S. while cooler than normal over the eastern half,” NatGasWeather said of conditions during this week’s EIA report period. “We expect a 69 Bcf build, slightly bearish versus expectations.”
As for overnight trends in the weather data, the firm observed no major changes. After easing through the upcoming weekend, national demand is still expected to return to strong levels starting next Tuesday through July 14.
“What continues to make the coming pattern solidly bullish is the likelihood of widespread above-normal temperatures for the nine- to 15-day period carrying over to days 16 through 20,” NatGasWeather said.
This could result in a series of below-normal storage injections that could widen the deficit to the five-year average to around 200 Bcf, according to the firm.
“It should be another wild day in the natural gas markets as major players position ahead of the long Fourth of July holiday weekend and where weather trends, production trends, the morning EIA storage report and global price moves could all induce rapid hourly price swings,” NatGasWeather said.
Heading into the weekend, traders will also have to factor in potential impacts from a new tropical cyclone in the Atlantic. According to the National Hurricane Center (NHC), Tropical Storm Elsa was about 780 miles east-southeast of the Windward Islands at 8 a.m. ET, moving “quickly westward.”
The NHC warned early Thursday that “interests in Florida should monitor updates to the forecast for this system, but it is too soon to determine what if any impacts could occur there next week given the uncertainty in the long-range forecast.”
August crude oil futures were trading $2.12 higher to $75.59/bbl at around 8:50 a.m. ET.
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July 01, 2021 at 08:06PM
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Natural Gas Futures Poised for 'Another Wild Day' as Prices Rally Ahead of Storage Report - Natural Gas Intelligence
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