October 13 natural gas opened today at $3.67 and trailed all day to end at $3.57 as today's natural gas data from EIA showed better than expected gains in storage during the report week.
Next resistance lies at the July 25 daily high at $3.771. A violation of that level would indicate upside potential to mid-July's $3.844. Beyond that, natgas could post a $4.00 handle.
Support lies at the August 27 daily low of $3.483, layered heavily down to $3.15.
According to EIA, nationwide natural gas hub prices grew moderately over the report week (Wednesday to Wednesday), which included the Labor Day holiday. The Henry Hub spot price closed yesterday at $3.68 per million British thermal units (MMBtu), up 14 cents per MMBtu from the beginning of the report week.
At the New York Mercantile Exchange (Nymex), the price of the October 2013 contract increased 10.1 cents, from $3.582 per MMBtu last Wednesday to $3.683 yesterday.
Falling power sector demand for natural gas resulted in a total gas consumption decrease of 0.8% compared with the previous report week. Consumption of natural gas for power generation (power burn) decreased 1.3% from the previous week, according to Bentek Energy data. The Midwest region registered a week-over-week decline of 34.3%. This more than offset increases in power burn in the Rockies, Southwest and Southeast, EIA said.
U.S. pipeline exports to Mexico fell 12.3% but are still 4.1% higher than this week last year.
Working natural gas in storage increased to 3,188 Bcf as of Friday, August 30, according to EIA's WNGSR. The 58-Bcf gain in storage levels was significantly higher than the 33-Bcf injection that occurred during the same week in 2012, but was in line with the 5-year average increase of 60 Bcf. Current inventories are 210 Bcf (6.2%) less than last year at this time and 43 Bcf (1.4%) above the 5-year average of 3,145 Bcf.
The net injection was larger than market expectations, which on average were reported to be around 54 Bcf.
This week's close-to-average net injection occurred despite modestly higher-than-normal temperatures during the storage report week. Temperatures in the Lower 48 states averaged 3.1 degrees warmer than the 30-year normal temperature and 1.0 degree warmer than the same period last year, and averaged 75.4 degrees for the week, compared to the 30-year normal of 72.3 degrees and 74.4 degrees last year, EIA said.
Data and partial text provided by EIA.