NYMEX July natural gas futures settled largely unchanged Tuesday -- up 0.2 cent to $4.709/MMBtu -- as the market waited for data later this week that is likely to show a sixth straight triple-digit storage injection while near-term forecasts call for above-normal temperatures.
The market is consolidating, "with prices settling into a smaller range after the recent burst of volatility," said Citi Futures Perspective analyst Tim Evans.
"The rally has stalled, but we have a little bit of support from weather over the next couple of days," said Gene McGillian, broker at TFS Energy Futures. "I'm not sure if it's because of the production overhang or because there's not enough sustained heat in the forecast, but we're back in a trading band and just treading water."
The market "has an upward bias," McGillian added. "If we get more heat than we have now and not enough movement on the storage deficit, we could basically move up to a $5 market."
Evans said that the "current week looks somewhat warmer than a day ago, with the added cooling demand helping to keep a floor under prices, but the forward outlook continues to suggest above-average storage injections at least through July 4. With production running 3-4% higher than a year ago, it would likely take a heat wave more intense than the five-year average in order to produce below-average injections."
The July contract traded Tuesday between $4.672/MMBtu and $4.739/MMBtu.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
