From the Chicago Mercantile Exchange:
Nat Gas futures remain in a short term upward move with the spot contract now remaining above the key $4/mmbtu for the third day in a row. As I have been discussing in detail in the newsletter I view the current move above the $4/mmbtu to be primarily technically driven as the current fundamentals have not changed and are neutral at best. The spot contract is now in a $4 to $4.16/mmbtu trading range. Whether or not the market is going to be able to remain in this range and even move above it will be very dependent on what is in store with the upcoming summer cooling season (yet to get underway).
For the next several weeks the latest NOAA six to ten day and eight to fourteen day forecasts are still mostly neutral. The forecasts are showing mixed pockets of both above and below normal temperatures but overall it does not appear to suggest that there is going to be a surge in either heating or cooling related Nat Gas demand during the month of May. For now the latest weather forecasts suggest that there will not be a sudden call on Nat Gas for cooling demand and thus it is highly likely that for the rest of the month of May weekly Nat Gas injections should outperform versus the historical data and thus narrow the gap between current inventory levels and the so called normal five year average.
This week the EIA will release its inventory on its normal schedule and time... Thursday May 16th at 10:30 AM. This week I am projecting the fifth injection of the season of 95 BCF into inventory. My projection for this week is shown in the following table and is based on a week that experienced a modest level of above normal temperatures during the report period. My projection compares to last year's net injection of 56 BCF and the normal five year net injection for the same week of 83 BCF. Bottom line the inventory deficit will narrow this week versus last year and the more normal five year average if the actual numbers are in sync with my projections. This week's net injection will be neutral with a slight bias to the bearish side when compared to the historical data.
If the actual EIA data is in line with my projections the year over year deficit will come in at about 698 BCF. The deficit versus the five year average for the same week will narrow to around 87 BCF. The early market consensus is projecting the fifth injection of the season in the range of 85 BCF to 110 BCF with the consensus at 95 BCF....MORE
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