Natural Gas Futures Up As Hot Weather Predicted
Natural gas trading is being affected by hot weather forecasts and the new storage report, as well as by inflation and economic indicators.
Natural gas storage is up but so are gas futures, even as weather predictions call for hotter weather in the coming weeks.
Before the US storage report was released today, gas futures were trading high, up by 3.77%. That placed them at $2.861.
The analyst expectation was that the natural gas storage report would show an increase of 89 Bcf, and futures were trading with that expectation. However, storage increased by a much higher 98 Bcf and natural gas futures are up by 2.84% at the time of this writing.
The rally that occurred yesterday is partly due to weather factors. There should be higher than average temperatures throughout the US today, reaching into the 80s and 90s for much of the country.
Texas and California are expected to have the highest temperature readings, perhaps as high as 100 degrees. The forecast initiated an increased demand for natural gas that could continue through the rest of the week.
The first half of the month could be marked by higher temperatures and higher demand for natural gas.
Inflation Remains High
US inflation is still high, and that will affect natural gas trading. We should see more news about inflation and the US’ economic situation this week from the Unemployment Claims news as well as Revised Nonfarm Productivity data. Most indicators point to elevated inflation that is not backing down.
The US Federal Reserve is not announcing interest rate cuts for now, nor are they releasing a prospective date for those cuts, so long as inflation remains high.
The US dollar weakened this week and helped push up the cryptocurrency market to nearing some all-time highs and the stock market to record highs across the Nasdaq Composite and the S&P 500.
Tensions remain high in the Middle East, between Hamas and Israel, as Israeli forces attacked a school run by the UN that was alleged to be housing Palestinian soldiers. Fighting there directly affects oil and gas supply in the region.
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