Investing

Gas Trading: Limited Demand Expected Amid Weather Forecast

Gas Trading: Limited Demand Expected Amid Weather Forecast

Natural gas prices experience pressure on Tuesday as Memorial Day weekend brings no significant changes in the market’s fundamentals. The short-term weather forecast predicts limited demand for natural gas, with pleasant temperatures prevailing across most of the United States.

Following the holiday weekend, natural gas opens the week at a trading price of $2.2015, down $0.0005 or -0.02%. The United States Natural Gas Fund ETF (UNG) settled at $6.64 on Friday, marking a decline of $0.12 or -1.85%.

Traders anticipate the continuation of unfavorable weather patterns, contributing to the expected low demand for natural gas in the first week of June. With localized areas experiencing limited high temperatures in the 90s, the majority of the United States is forecasted to have pleasant temperatures in the 70s and 80s. This weather pattern results in light to very light national demand for natural gas.

Weather Forecast Points to Gas Market Challenges

The upcoming period from May 26 to July 1 will feature an active weather pattern across the country. A great deal of upcoming showers and thunderstorms might become a real bummer for the industry. Temperatures during this period are predicted to range from the 60s to 80s. Further, it may contribute to light national demand, except in the hotter regions of the Southwest deserts and South Texas. However, cooler temperatures in the Great Lakes and Northeast regions, with overnight lows in the upper 30s and 40s, may lead to a slight increase in heating demand.

According to the Energy Information Administration’s weekly report, the estimated amount of working gas in storage as of Friday, May 19, 2023, stood at 2,336 Bcf. This represents a net increase of 96 Bcf compared to the previous week. Stocks are 529 Bcf higher than last year at the same time and 340 Bcf above the five-year average of 1,996 Bcf. The current natural gas investing level of 2,336 Bcf falls within the five-year historical range.

Natural Gas Trend Continues Bearish, Showing Potential for Downside

In other news, the Mountain Valley natural gas pipeline, valued at $6.6 billion, may receive federal approval as part of a budget deal aimed at resolving the debt limit crisis in the United States. Equitrans Midstream Corp, the owner of the pipeline, faces delays due to unfavorable court rulings and opposition from environmental groups. The proposed legislation includes expedited federal permits and limited judicial review to streamline the project’s approval process. However, further reviews and potential legal challenges may still cause delays.

From a technical and fundamental analysis standpoint, the natural gas price prediction for tomorrow continues to exhibit a bearish trend. Today’s early weakness further confirms this assessment. Unless there is a significant shift in demand, favorable weather conditions and rising production may continue to weigh down the market.

The post Gas Trading: Limited Demand Expected Amid Weather Forecast appeared first on FinanceBrokerage.

You May Also Like

Editor's Pick

In this edition of StockCharts TV‘s The Final Bar, Dave shows how breadth conditions have evolved so far in August, highlights the renewed strength in the...

Economy

Boeing’s crew spacecraft Starliner will stay docked with the International Space Station into August, NASA confirmed on Thursday, as the mission remains on hold...

Stock

S&P 500 pared back its intraday gain on Wednesday following a Bloomberg report that Royal Group has built a multi-billion-dollar short position in U.S....

Economy

A U.S. judge has ruled that former Bed Bath & Beyond investor Ryan Cohen can be sued by investors over a tweet he posted featuring an...

Disclaimer: Richpeoplenetworks.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 Richpeoplenetworks.com

Exit mobile version