Market Fundamentals Remain Bearish
Despite a potential technical rebound, the underlying fundamentals are keeping downward pressure on prices in the stock market. Production levels remain strong, hovering above 102 Bcf/d, leading to ongoing supply surpluses that have been impacting natural gas prices throughout July.
Weather Patterns and Demand Outlook
According to NatGasWeather, hot high-pressure systems are expected to dominate most of the U.S. from August 1-7, with temperatures ranging from the upper 80s to 100s. This weather pattern is anticipated to drive significant national demand, although the Upper Great Lakes region may experience cooler temperatures due to incoming weather systems.
EIA Storage Report Expectations
Analysts have different predictions for today’s EIA storage report, with estimates ranging from a 30 to 34 Bcf injection. The most significant forecast stands at +30 Bcf, aligning with market expectations and slightly below the five-year average of +33 Bcf. Last week, cooler temperatures in the eastern U.S. and hotter conditions in the West were observed.
Market Forecast
The short-term outlook for natural gas futures remains cautiously bearish, given oversupply concerns and strong production levels. Traders are advised to closely monitor the EIA storage report for any surprises that could impact market sentiment. Unless there are significant bullish catalysts, prices are expected to trend downwards in the near future.
Technical Analysis
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