Natural Gas Price Fundamental Daily Forecast – Next Major Move Determined by LNG Demand
Natural gas futures rise on Friday amid mounting bets that the impact of Hurricane Delta on liquefied natural gas production in the region will be minimal. Dealers are closely monitoring the situation, as a direct hit on a system could put it out of operation for some time. This would reduce the demand for LNG, which is necessary to avoid storage problems before the winter season.
At 9:58 GMT for December, natural gas futures are trading at $ 3.164, up $ 0.015, or + 0.48%.
US Energy Information Administration weekly storage report
The U.S. EIA reported Thursday that domestic natural gas shipments rose 75 billion cubic feet for the weekend ending October 2. On average, the analysts surveyed by S&P Global Platts forecast an increase of 71 billion cubic feet. Total inventories now stand at 3.831 trillion cubic feet, up 444 billion cubic feet from last year and 394 billion cubic feet above the five-year average, the government said.
NGI reported prior to the EIA storage report that analyst estimates hovered around an increase in the low to mid 1970s Bcf. The seven analysts interviewed by Bloomberg responded with estimates between 67 Bcf and 85 Bcf with a median of 73 Bcf. A poll in the Wall Street Journal had the same reach but got a median of 74 Bcf. A Reuters poll with the same projection area had a median of 73 Bcf. NGI has set the build at 75 Bcf.
Short-term weather forecast
NatGasWeather from October 9th to 15th: “A cursory glance will bring heights of the 50s and 60s to the Upper Great Lakes and New England for the next few days. Heavy rain and winds will hit the Gulf Coast today as the Hurricane Delta lands in Louisiana and then heads north. Mild rains will hit the Northwest this weekend and the Midwest next week, tapping the cool Canadian air for the lows of the 20s and 30s. The rest of the US will be warm with highs of 70s and 80s alongside hotter 90s in the Southwest. Overall, national demand will be low. "
The EIA report was bearish, but traders are focused on the Hurricane Delta and its potential impact on LNG demand.
A direct hit from an LNG facility causing damage could have a negative impact on prices by limiting production and shipping.
If the Hurricane Delta fails and there is no damage to facilities or delays in shipping, prices may rise in anticipation of higher demand.
At this point a combination of heavy LNG demands and heating demands will be required to avoid storage problems in about a month.
In our economic calendar you will find all economic events of today.
This article was originally published on FX Empire
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