Natural gas futures are edging higher shortly before the regular session opening on Thursday, and the release of the latest government weekly storage statistics.
Prices took a beating on Wednesday as the late-January forecasts continued to come in weaker than previously expected. Traders also reacted to expectations for another underwhelming weekly storage withdrawal.
At 14:51 GMT, March natural gas futures are trading $2.095, up $0.012 or +0.58%.
Short-Term Weather Outlook
According to NatGasWeather for January 16-22, “Cold air continues across the Northern Plains with highs of only -0s to 20s. However, much warmer versus normal temperatures continue over the southern US and Mid-Atlantic Coast with highs of upper 60s to 80s.
A cold shot will race across the Upper Midwest & Northeast today and Friday for a modest increase in demand as lows drop into the 0s to 20s.
A strong weather system will track into the West today, then across the central and eastern US this weekend and early next week with increasing rain and snow, followed by colder temperatures.
Overall, light to moderate demand the next few days, then high Sunday-Wednesday.”
U.S. Energy Information Administration Weekly Storage Report
The EIA will report on weekly storage at 15:30 GMT. The report is expected to show a drawdown of 91 Bcf for the week-ending January 10.
Last year, the EIA recorded an 82 Bcf withdrawal for the similar week, and the five-year average is a withdrawal of 184 Bcf. Last week, the EIA reported a 44 Bcf withdrawal for the week-ended January 3.
Bloomberg analysts had a median estimate for a 93 Bcf pull, with estimates ranging from minus 84 Bcf to minus 101 Bcf. A Reuters survey showed a 95 Bcf pull, with a range of minus 87 to minus 102 Bcf.
The ICE EIA Financial Weekly Index futures contract settled Tuesday at a 94 Bcf withdrawal. Natural Gas Intelligence’s model predicted a pull of 106 Bcf.
The short-term range is $2.062 to $2.204. It 50% level at $2.133 is controlling the direction of the market. A sustained move under this level is bearish.
The intermediate range is $2.290 to $2.062. Overtaking $2.133 could drive the market into its 50%-61.8% retracement zone at $2.176 to $2.203.
Taking out $2.204 could trigger an acceleration to the upside with the next targets coming in at $2.290 to $2.308.
This article was originally posted on FX Empire
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