FxWirePro: U.S. Natural gas inventory preview

Natural gas is currently trading at $2.58 per MMBtu.

Key factors at play in the natural gas market –

• Approaching summer in the Northern hemisphere likely to have some bullish impact on natural gas price. The price has moved higher after reaching our target around $2.42 area. Critical resistance lies around $2.65 area.
• Higher U.S. and global supplies keeping the natural gas price depressed. However, summer demand likely to push the price higher towards $2.8 area.
• Supply bottlenecks remain the main source of concern in the United States. This year due to excess natural gas supply while drilling for shale oil pushed the price to negative at the Permian basin, which recently became the highest producing field of the world.
• The United States would become the biggest supplier of natural gas to Europe replacing Russia in the next 4 years, should president Trump gets re-elected to office
• Lower global price acting as a key downside catalyst. Price in the UK declined to 34 pence per therm, down from record 84 pence.

Now, for the inventory,

According to the latest numbers, working gas in the underground storage remains at 1.753 trillion cubic feet (Tcf). Stocks are 137 bcf higher less than last year, and 274 bcf below the five-year average. The chart from EIA shows the level of inventory. The second chart from investing.com shows weekly changes in inventory.

• Last week, the inventory rose by 100 billion cubic feet against an expectation of 104 billion cubic feet build. Today 101 billion cubic feet build expected.
• EIA will release the inventory report at 14:30 GMT.