Natural Gas

Natural Gas Price Fundamental Daily Forecast – Hovering Near Psychological $3.00 Level after Earlier Test

Natural gas futures are trading higher early Tuesday after briefly piercing the psychological $3.00 level and touching its highest level since February 23.

Overnight forecasts calling for higher demand due to colder temperatures this weekend and into next week, according to NatGasWeather, helped fuel the early surge. However, gains were likely limited as a loss of cooling degree days (CDD) offset the added heating degree days (HDD). This led to expectations of “comfortable” temperatures over the South and Southeast, the firm said.

At 14:00 GMT, June natural gas is trading $2.988, up $0.022 or +0.74%.

“While HDD are solidly above normal the next 10 days, this late in the heating season it won’t drive nearly as much demand compared to the core winter months,” NatGasWeather said. “…We continue to wait on more impressive, sustained heat to build over the U.S., and we expect it won’t occur until late May.”

Short-Term Weather Forecast

According to NatGasWeather for May 4 – May 10, “A weather system and associated cool front with showers and thunderstorms will advance out of the Plains, and Midwest and towards the East the next few days with highs of 50s and 60s, lows of 30s and 40s. It will be warm today over the East with highs of 70s to 90s until cooler air arrives Wednesday – Thursday. Cooling will also push into Texas and the South/Southeast in the coming days with highs of 70s to low 80s for light demand, then warming back into the 80s and 90s late this weekend into next week. The West will see a mix of mild conditions over the Northwest with highs of 50s and 60s but very warm to hot over the Southwest with highs of 80s to 90s. Overall, moderate the rest of the week.

Early Look at Weekly EIA Storage Report

Natural Gas Intelligence (NGI) is reporting that Energy Aspects issued a preliminary estimate for a 58 Bcf injection for the week ended April 30. The firm characterized the recent run of EIA reports as a case of “storage whiplash.”

Daily June Natural Gas

Daily Forecast

Tuesday’s early rally through last week’s high of $2.988 reaffirmed the uptrend. If the move continues to generate enough upside momentum then look for a near-term test of the February 17 top at $3.082. However, in over to get there this week, we’re probably going to need to see colder temperatures in the North for a prolonged period of time, or a really bad miss to the downside in this week’s EIA report.

Support comes in at $2.868 to $2.802. The main trend will change to down on a move through $2.735.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.