Natural gas futures rose Thursday after a government report showed stored gas is well below forecast. Prices rose in the news, but not too much as it still represented an improvement during the first week of the summer cooling season. The market would have moved much higher if there had been a decline, but that’s what life is like during the coronavirus pandemic.
On Thursday, August natural gas settled at $ 1,734, an increase of $ 0.063 or 3.77%. For the week, the market rose $ 0.190 or 12.31%.
With the exception of Thursday’s rally, most of the gains were attributed to warm weather and short coverage. And maybe some speculative buyers, if there are any left after the drilling that took just a week ago when prices hit a multi-year low.
Weekly Storage Report from the US Energy Information Administration
According to EIA estimates, stored working gas was 3,077 Bcf as of Friday, June 26, 2020. This represents a net increase of 65 Bcf from the previous week. Stocks were 712 Bcf higher than last year at this time and 466 Bcf above the five-year average of 2,611 Bcf. At 3,077 Bcf, total working gas is within the five year historical range.
The consensus estimate was for a 77 Bcf storage construction. The national survey averages called for a construction of + 74-79 Bcf. The NatGasWeather algorithm predicted a 68 Bcf construct.
Short-term time outlook
According to NatGasWeather from July 2 to 8, “The upper high pressure will spread from Texas to the Great Lakes and throughout the rest of the southern US. With very hot temperatures in the high 80s to 100s, highest in the deserts of the southwest.
The colder exceptions continue in the Northwest and New England as weather systems stagnate with showers and maximum temperatures of 60 and 70 degrees local light demand.
The weekend of July 4 will continue to be very warm and hot in most of the US with highs of 80-100 degrees in addition to the northwest and northeast corners. There will also be heavy showers in the southeast this weekend, although they are still very hot and humid with maximum temperatures from the upper 80s to the lower 90s.
In general, national demand will be high. “
Short-term outlook
Given the long vacation weekend, we are likely to see a price gap in either direction, depending on changes in the short-term forecast. Remember that merchants are looking for 14 days out. The heat of this weekend has already been valued.
Next week’s build will be a bit smaller than this week due to warmer conditions in many regions of the US Week after week.
To see all of today’s economic events, see our economic calendar.
