October 13 natural gas opened today at $3.79 after ranging lower since Friday, Sept. 6.
Next resistance lies at the July 24 daily high at 3.796 and $3.84. 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 and layered heavily down to $3.15.
According to EIA, natural gas hub prices decreased in most areas except the Northeast during the report week (Wednesday, September 4, to Wednesday, September 11). The Henry Hub spot price closed yesterday at $3.60 per million British thermal units (MMBtu), down 8 cents from $3.68 the previous week..
At the Nymex, futures prices also decreased over the week. The October contract fell from $3.683 per MMBtu on September 4 to $3.567 per MMBtu Wednesday.
Consumption increased moderately during the report week, according to Bentek Energy estimates. Total natural gas consumption increased by 1.1% from the previous week. Residential and commercial consumption rose most noticeably by 6.6%. Total power burn for the week decreased by 0.9%, driven by the decreases in the Northeast, Texas, Rockies, and Southwest. Power burn increased in other regions of the country, particularly in the Midwest where power burn rose by 26.9% from the previous week because of warmer temperatures.
Working natural gas in storage increased to 3,253 Bcf as of Friday, September 6, according to EIA's WNGSR. The 65-Bcf gain in storage levels was significantly higher than the 27-Bcf injection that occurred during the same week in 2012, but was in line with the 5-year average increase of 62 Bcf. Current inventories are 172 Bcf (5.0%) less than last year at this time and 46 Bcf (1.4%) above the 5-year average of 3,207 Bcf.
The net injection was smaller than market expectations, which on average were reported to be around 69 Bcf.
The lower-than-expected build contributed to natural gas prompt-month Nymex futures prices increasing by about 5 cents per MMBtu to just around $3.62 per MMBtu immediately following WNGSR's release. In the hour following the release, prices rose an additional 2 cents per MMBtu.
Data and partial text provided by EIA.