Natural Gas Price Fundamental Daily Forecast – Prices May Be Supported by Heating Demand
Natural gas futures rose on Thursday on forecasts that colder weather will lead to increased heating demand. A drop in production due Hurricane Nate also helped underpin prices.
Traders should nearly no reaction to the U.S. Energy Information Administration’s report showing storage last week increased by slightly more than expected.
According to the EIA, utilities added 87 billion cubic feet of gas into storage in the week to October 6, leaving the total amount of fuel in inventories near the five-year average for this time of year at around 3.6 trillion cubic feet.
Analysts were looking for an injection of 82 bcf. That compares with a 79 bcf increase during the same week a year earlier and a five-year average of 87 bcf for that period.
Forecast
The news about increased heat demand was a surprise. This could cause some short-covering but it would be better for the longer-term structure of the market if a support base was built instead.
This article was originally posted on FX Empire