Quote of the Day
Pleasure in the job puts perfection in the work.
Natural gas prices sold off on Wednesday in end the day trading on either side of the psychological $2 per mmbtu level. So far this morning the market is once again trading either side of the $2 level ahead of this morning’s inventory snapshot. The weather remains neutral to bearish and today’s injections report is expected to be above last week but below the historical data points.
The EIA report is expected to show and injection into inventory of 78 BCF later this morning for the week ending May 13 according to the Reuters market consensus survey. The estimate compares with builds of 56 bcf in the prior week, 98 bcf the same week a year earlier and a five-year average increase of 91 bcf.
From a technical perspective the spot June Nymex contract actually breached and settled below the range support level of $2.04/mmbtu for the last several trading sessions and is now in a technical short term downtrend. If the market remains below the $2.04/mmbtu level it is likely that the next downside target is the psychological $2/mmbtu level with the actual technical range support level now at $1.975/mmbtu. From a technical viewpoint the market is on the defensive and is likely to mover lower over the next few trading sessions.
The latest six to 10-day forecast is consistent with those issued during the previous day with the area of projected below normal temperatures now confined to the western 15 to 20% of the United States. The rest of the country is now projected to experience mostly above normal temperatures. The eight to fourteen day forecast is even less supportive with about 60 percent of the country now forecast to experience above normal temperatures. With seasonable temperatures now emerging over the country there is likely to be only minimal if any heating oil demand.