US natural gas prices (NATGAS) launched new week's trading with a bullish price gap. Move higher at the opening was driven by new set of weather forecasts for the United States, that points to noticeable pick-up in temperatures, especially in Texas. It is also expects that performance of renewable energy will be mixed - more wind power but less solar power - and it should not have much impact on gas demand from power plants.
NATGAS jumped around 2% at the start of trading but has started to pull back later on. Price tested local lows from the end of the previous week and started to recover after test turned out to be a failure. While number of US gas drilling rigs in the United States continues to drop, natural gas prices dropped quite significantly last week. Also, 5 out of 6 previous weeks so bigger-than-expected build in natural gas stockpiles, what limits outlook for a drop in comparative inventories.
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6-10 day as well as 8-14 day weather forecasts point to a significant increase in temperatures in Texas and central states. On the other hand, west coast is expected to see below-average temperatures and more cloudy weather, what will limit solar power production. Source: NOAA
Forecasts for the whole summer period point to higher-than-average temperatures, what should lead to increased demand for gas from power plants in the coming weeks. Source: NOAA
NATGAS is currently trading around 0.7% higher, after partially recovering from earlier declines. Weather forecasts become more and more supportive for gas prices but seasonal patterns suggest that declines may last until June 19-21, 2023. Seasonality hints at a period of price increases later on. Source: xStation5
