July natural gas futures mounted a slight recovery on Thursday after the release of the weekly U.S. Energy Information Administration’s weekly storage report, however, the buying wasn’t strong enough to turn the market higher for the week. This suggests the reaction may have been fueled by short-covering.
According to the EIA, natural gas supplies in storage in the U.S. rose more than expected last week. The EIA said in its weekly report that natural gas storage in the U.S. rose by 68 billion cubic feet for the week-ended May 12. Traders were looking for a build of 61 billion Bcf.
In comparison, last week’s report showed a build of 45 Bcf for the week-ended May 5. A year ago, the increase was 73 Bcf and the five-year average is a rise of 87 Bcf.
The EIA also said that total natural gas in storage currently stands at 2.369 trillion cubic feet, 13.6% lower than levels at this time a year ago, but 10.8% above the five-year average for this time of year.
Weekly July Natural Gas Forecast
With the storage report out of the way, investors are going to go back to focusing on limited production, rising exports and the weather models.
The limited production and rising exports are going to continue to be long-term supportive. This should underpin the market on dips.
A change in the weather forecast earlier this week is the catalyst behind this week’s selling pressure. According to the latest weather models, most of the…