Natural Gas Price Fundamental Daily Forecast – Traders Hunting for Stops Over $2.568 Amid Calls for Chilly Temps

Natural gas futures are edging higher for a fourth session on Wednesday, putting the market in a position to take out the two-week high and change the short-term trend to up.

Once again, the catalysts underpinning the market and driving out the weak short-sellers are stronger spot market prices amid forecasts pointing to chilly temperatures in store for the Great Lakes and Northeast late in the month.

At 12:50 GMT, December Natural Gas is trading $2.548, up $0.016 or +0.63%.

On Tuesday, the Global Forecast System (GFS) showed a “much colder pattern” compared to its European counterpart, and the midday GFS run trended even colder for late October, according to NatGasWeather.

“There remain three major periods of interest, starting with a cold shot currently sweeping across the northern U.S. for a bump in national demand,” the forecaster said. “This will be followed by national demand dropping below normal this weekend through early next week…but where the data is cold enough and bullish in most weather models is October 24-30 as a series of stronger cold shots advance deep into the U.S. with widespread lows of teens to 30s.”

Short-Term Weather Outlook

According to NatGasWeather for October 16-22, “A weather system with showers and cooling will sweep across the Midwest and Northeast the next few days with lows of 30s to 40s. Texas and the southern US will be mostly comfortable with highs of upper 60s to lower 80s, although locally hotter over the Southwest, South Texas, & Florida. High pressure and above normal temperatures will gain across the eastern half of the country this weekend with near perfect highs of 60s to 80s, while slightly cool over much of the West. Overall, decent demand the next few days, then lighter this weekend.”

Daily Forecast

The trend will change to up on a trade through $2.568, making this today’s upside target. Should a move through this level generate enough upside momentum, then with help from the “chilly” forecast, we could see an eventual surge into a 50% retracement level target at $2.636.

A failure to reach or blow through $2.568 will indicate traders are becoming concerned over Thursday’s government storage report that could show another triple digit build. However, since this is stale data and traders are more focused on the future weather, any correction is likely to be short-lived.

Natural Gas Price Prediction – Prices Rise on Cool Weather Forecast

Natural gas prices surged another 2.5% on Tuesday. Tropical depression 15, forming in the Atlantic and there is one other storm that has less than a 10% chance of becoming a tropical cyclone. There is also one storm in the Gulf of Mexico with a 10% chance of becoming a tropical cyclone. The weather is expected to be colder than normal throughout most of the mid-west which could buoy natural gas heating demand.

Technical Analysis

Natural gas prices rallied sharply and is poised to test resistance near the October highs at 2.40. Support on natural gas is seen near the 10-day moving average at 2.28 and then the October lows at 2.18. Short term momentum has flipped and turned positive in oversold territory as the fast stochastic generated a crossover buy signal. Additionally, the current reading on the fast stochastic is 43, above the oversold trigger level of 20 and in the middle of the neutral range. The fast rebound in the fast stochastic reflects accelerating positive momentum. Medium-term momentum as turning and the MACD (moving average convergence divergence) is poised to generate a crossover buy signal.

Export Demand is Flat Week over Week

The Energy Information Administration reports that liquid natural gas exports are flat week over week. Eleven LNG vessels, according to the EIA, with a combined LNG-carrying capacity of 41 Bcf departed the United States between October 3 and October 9. One vessel was loading at the Sabine Pass LNG terminal on Wednesday. Net injections into storage totaled 98 Bcf for the week ending October 4, compared with the five-year average net injections of 89 Bcf and last year’s net injections of 91 Bcf during the same week.

Natural Gas Price Forecast – Natural Gas Markets Rally Again

Natural gas markets have shown signs of strengthening for the third day in a row, and now are clear of those wicks that had caused a bit of concern late last week. With that being the case, it looks as if the sellers are starting to get trapped and eventually that could spring the “Winter pop” that I’ve been looking for. The $2.20 level looks to be important, and as long as that’s going to be the case it’s likely that we will see buyers on dips in that general vicinity.

NATGAS Video 16.10.19

Ultimately, this market probably will try to return to the $2.70 level, but it may take some time to get there. What we need to see is some type of cold forecast in the United States to have people assuming there is going to be much more demand. That will eventually happen, and when it does it tends to be a very explosive move. Pullbacks at this point should continue to offer plenty of value, especially near the $2.20 level, which has been so stringently defended since we broke above there back in late August. Remember, we are trading the November contract and that tends to mean higher pricing. At this point, I still believe in buying pullbacks as natural gas should continue to find plenty of buyers at these extraordinarily low levels. This is a seasonal trade, so don’t get too buried into the trade with huge amounts of funds, but it is a way that I pad my account every year.

Please let us know what you think in the comments below

Natural Gas Price Fundamental Daily Forecast – Traders Await Further Confirmation of Late October Cold Spell

Natural gas futures are inching lower early Tuesday after failing to follow-through to the upside overnight, following two days of higher gains. It’s probably too early to pass judgment on the price action, which is suggesting investor indication and impending volatility.

The market could also be going through a transition period after last week’s steep sell-off as weather models show colder temperatures arriving in late October. Buyers are being a little tentative, however, because they aren’t sure if the weather pattern is indicating a “cold snap” or something more pronounced.

The catalysts underpinning the market are stronger spot market prices amid forecasts pointing to cooler temperatures in store for the Great Lakes and Northeast later this week.

Additionally, guidance from both the American and European models reflected a colder pattern in the 11-to-15 day period, according to Bespoke Weather Services.

At 11:47 GMT, December natural gas is trading $2.504, up $0.006 or +0.24%.

Short-Term Weather Outlook

According to NatGasWeather for October 15-21, “A strong cool shot will sweep across the Midwest the next few days after tracking out of the Rockies and Plains with lows of 20s and 30s. Texas and the southern US will be mostly comfortable with highs of upper 60s to lower 80s, although locally hotter over the Southwest, South Texas & Florida. The West will see a mix of weather systems and warm breaks, coolest Northwest with 50s and 60s, while hottest over California and the Southwest with 70s to near 90 Fahrenheit. Overall, stronger demand this week compared to last week due to cooling across the North.”

Mid-Term Weather Outlook

Bespoke chief meteorologist Brian Lovern said, “…models appear to be bringing a wave of tropical forcing out toward the central Pacific, allowing a warmer ridge to develop in the West, sending a colder trough into the eastern half of the nation. The bulk of the forcing hands back over the Indian Ocean, however, and without blocking in place, it is possible that this colder push is simply another transient one.”

Daily Forecast

The shift in the weather pattern has been just enough so far to chase out a few of the weaker shorts. The stronger short-sellers want to see stronger evidence of a prolonged cold spell.

“Even with the colder trends over the weekend, gas-weighted degree day totals over the next 15 days are still on track to fall below normal,” Bespoke said.

“We respect the model output but want to see more in order to be convinced that this is a fundamental shift in base state toward higher than normal demand, as opposed to just another window of variability,” Bespoke chief meteorologist Brian Lovern said.

The daily chart indicates the direction of the market on Tuesday will likely be determined by trader reaction to a minor 50% level at $2.278. Holding above it will indicate the short-covering is getting stronger.

Natural Gas Price Prediction – Prices Surge as Momentum Turns Positive

Natural gas prices rallied sharply on Monday rising more than  3% recapturing resistance which is now support. There are two tropical storms in the Atlantic one with a 90% chance that it will turn into a tropical cyclone. There is also one storm in the Gulf of Mexico with a 10% chance of becoming a tropical cyclone. The disturbance in the Atlantic could make their way across the Atlantic and generate production issues. The weather is expected to remain normal for the next 8-14 day, keeping natural gas heating demand subdued.

Technical Analysis

Natural gas prices rallied sharply rising more than 3% and recapturing resistance which now supports near the 10-day moving average at 2.275. Support on natural gas is seen near the October lows at 2.18. Short term momentum has flipped and turned positive in oversold territory as the fast stochastic generated a crossover buy signal. Additionally, the current reading on the fast stochastic is 26, above the oversold trigger level of 20 which points to accelerating positive momentum. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Supply Slips in Recent Week

The Energy Information Administration reports that supply is down. The EIA reveals that the average total supply of natural gas fell by 1% compared with the previous report week. Dry natural gas production remained constant week over week. The average net imports from Canada decreased by 3% from last week. Total U.S. consumption of natural gas fell by 3% compared with the previous report week, according to the EIA. Natural gas consumed for power generation declined by 6% week over week because of overall lower cooling demand.

Natural Gas Price Forecast – Natural Gas Markets Fail To Hang Onto Gains

Natural gas markets gapped higher to kick off the trading session on Monday, shot towards the $2.30 level and then gave back all of those gains to form a rather ugly looking candle stick. That being said though, they did wipe out a lot of stop loss orders just above the couple of inverted hammers from late last week. Even though this is a very bearish candle stick on the chart, the reality is a lot of damage has been done to those sellers and therefore it’s likely that we will eventually start to see the market break to the upside. As things stand right now, the gap down to the $2.30 level should be thought of as potential support, and that could continue to push this market higher.

NATGAS Video 15.10.19

Slightly colder temperatures have hit the northern part of the United States, although not necessarily freezing. Nonetheless, this is the first sign that winter is coming and will of course push this market to the upside given enough time. Ultimately, this is a market that is very seasonally driven and that’s essentially what I’m counting on. The catch of course is to wait for the bullish pressure that the winter almost always brings. If we can get that, then this market can really start to take off. On a break above the candle stick for the trading session on Monday, that would not only be bullish as a positive candle stick, but it would show the stops being run from several of the previous trading sessions.

Please let us know what you think in the comments below

Natural Gas Price Fundamental Daily Forecast – Higher as Speculative Bulls Play for Colder Temperatures

Natural gas futures are trading higher early Monday, following through to the upside following Friday’s potentially bullish closing price reversal bottom. The price action the last two days indicates bargain-hunters and bottom-pickers may be trying to establish early positions ahead of the winter season.

Friday’s price action suggests traders are already thinking about cold weather returning with the nearby November futures contract losing $0.004, while the December and January futures contracts were posting gains of $0.04 and $0.043 respectively.

At 07:31 GMT, December natural gas is trading $2.498, up 0.041 or +1.67%.

The early strength may be catching some of the weaker short-sellers off guard because ahead of the week-end, the weather wasn’t suggesting the reemergence of stronger demand. Furthermore, the spot market was trending lower, production was trending higher and traders were mentioning the possibility of a triple-digit build in this week’s government storage report.

Short-Term Weather Outlook

According to NatGasWeather for October 14-20, “High pressure will rule the southern US to open the week with highs of 70s and 80s, locally 90s. A weak weather system will provide a glancing cool shot across the far northern US Monday, followed by a stronger cool shot mid-week that tracks out of the Rockies and Plains with lows of 20s & 30s for stronger demand. This system will also cool portions of Texas and the South mid-week. The West will see a mix of weather systems and warm breaks with highs in the 50s and 60s north and 70s to lower 90s over California and the Southwest. Overall, stronger demand this week compared to last week due to stronger northern US cooling.”

U.S. Energy Information Administration Weekly Storage Report

Last week, the EIA reported that domestic supplies of natural gas rose by 98 billion cubic feet for the week-ended October 4. Trader estimates ranged from an 80 Bcf injection to a 107 Bcf injection.

The EIA reported a 91 Bcf build for the same week last year, and the five-year average stood at 89 Bcf.

Total stocks now stand at 3.415 trillion cubic feet, up 472 billion cubic feet from a year ago, but 9 billion below the five-year average.

Natural Gas
Daily December Natural Gas

Daily Forecast

Early in the session on Monday, we’re going to be watching the price action. Later in the session, the weather forecasts will be updated. We should find out at that time if the early rally is being fueled by a forecast calling for increased demand over the next 11 to 15 days, or if it is being driven by speculative buying.

The trend is down, but Friday’s price action and today’s early follow-through rally indicate that momentum may be shifting to the upside.

Overcoming and sustaining a rally over $2.478 will indicate the buying is getting stronger.

The key level to watch is $2.568. Taking out this level will change the trend to up. If accomplished with rising volume, it could trigger a further rally over the near-term into at least $2.636.

Relatively low prices for this time of the year may be underpinning the market, but it’s going to take a major shift in the weather forecasts to change the trend to up.

Natural Gas Price Fundamental Weekly Forecast – Strong Production, Mild Weather Forecasts Capping Gains

Natural gas futures finished sharply lower last week and in a position to challenge the summer bottom at $2.135. The selling pressure was primarily driven by another large storage build, lower spot gas prices and weather models showing weaker demand in the 15-day forecast. Specifically, Permian Basin production growth exerted the most pressure on prices.

Last week, December natural gas settled at $2.457, down 0.067 or -2.65%.

Permian Basis Production

According to reports, Kinder Morgan’s Gulf Coast Express unleashed huge volume into the market. With little demand to soak up the deluge of supply, prices collapsed from $1.00 earlier in the week to as low as 10 cents on Friday.

Production Overwhelms the Market

“Each day this week finished with declines at the front of the curve and since September 10, there have been four positive day/day changes for the prompt-month contract,” Mobius Risk Group said. “While it is reasonable to view the market as ‘oversold’, a change in weather model output (cooler Northern tier) may be needed before momentum changes.”

U.S. Energy Information Administration Weekly Storage Report

The EIA reported last Thursday that domestic supplies of natural gas rose by 98 billion cubic feet for the week-ended October 4. Trader estimates ranged from an 80 Bcf injection to a 107 Bcf injection.

The EIA reported a 91 Bcf build for the same week last year, and the five-year average stood at 89 Bcf.

Total stocks now stand at 3.415 trillion cubic feet, up 472 billion cubic feet from a year ago, but 9 billion below the five-year average.

Mid-Term Weather Forecast

The latest weather outlooks are starting to hint at the return of cold, teasing a chillier pattern trying to push into the northern United States to close out October, but with more evidence needed, according to NatGasWeather.

“It’s possible the natural gas markets notice a few heating degree days being added overnight, but more importantly could notice the latest data trying to hint at a colder air into the northern United States October 25-30. Clearly, the onus is on widespread cold arriving and lasting if weather sentiment is to be considered bullish, but the data took a small step in that direction.”

Weekly Forecast

Over the past few weeks, we’re seen bursts of heating demand, but the rallies have fizzled as rising production continues to put a cap on prices while threatening to take out summer lows.

“The key remains late October/early November weather. No clear signal has yet emerged. Until this changes, price movements may be small,” EBW said.

With prices at historically low levels for this time of year, the market could turn higher rather quickly if a lingering cold snap emerges, but that’s a big “IF”.

Natural Gas Price Prediction – Prices Rise, but Trend Remains Down

Natural gas prices closed higher on the session but made a lower low and a lower high which is a sign of a downtrend. Tropical storm Melissa is hovering in the Atlantic near New York and will move back out to see. This will not cause any disruption to natural gas infrastructure. The weather is expected to remain normal for the next 8-14 day, keeping natural gas heating demand subdued.

Technical Analysis

Natural gas prices rebounded into the close, but the downtrend is intact. Prices continued to break down during the week and pushed through an upward sloping trend. Resistance is seen near the 10-day moving average near 2.28. Short term momentum has flipped and turned positive in oversold territory as the fast stochastic generated a crossover buy signal. Additionally, the current reading on the fast stochastic is 8, well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Demand Declined in the Latest Week

The EIA reported that demand declined in the latest week drive by the power generation sector. Total US  consumption of natural gas fell by 3% compared with the previous report week, according to the EIA. Natural gas consumed for power generation declined by 6% week over week because of overall lower cooling demand. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 1%. Natural gas exports to Mexico were the same as last week, averaging 5.4 Bcf per day.

Natural Gas Weekly Price Forecast – Natural Gas Markets Testing Support

The natural gas markets are currently trading the November front month contract, which of course normally means more demand as the temperatures plunged in the United States and the European Union. All things being equal, this is a market that should continue to find buyers underneath, and therefore eventually once we get cold weather forecasts, the market should take off to the upside rather stringently. However, it’s difficult to simply throw money into the market and hope. The brake above a hammer from the previous week to me is the buying opportunity for longer-term traders. At that point, then we should see a drive towards the 50 week EMA, and then eventually the $2.70 level which should be resistance as well.

NATGAS Video 14.10.19

Going forward, I fully believe that this market will rally significantly into the winter as it typically does, but this is a short-term trade. This is not something that you should hang onto for a long amount of time, perhaps two months. This is one of my favorite trades of the year, but timing the entry is always a bit difficult. All things being equal, I don’t have any interest in selling because quite frankly it would take some type of catastrophic collapse in the market to break down below the $2.00 level. I anticipate that this market will be very noisy, but eventually get some clarity that will have buyers jumping in drastically. Keep your position size small and add as it works out in your favor.

Natural Gas Price Forecast – Natural Gas Markets Show Signs of Support

Natural gas markets rally during the trading session on Friday, breaking above the $2.25 level to the upside late in the day. At this point, the candle stick for the Thursday session will be crucial to pay attention to, because it then could become an “inverted hammer”, which of course is very bullish once it gets broken to the upside. There will be a lot of sellers that will suddenly be trapped if that gets broken, and then I anticipate that the market will go looking towards the red 50 day EMA.

NATGAS Video 14.10.19

To the downside, if we break down below the lows of the trading session on Friday, it’s very likely that the market could drop to the $2.15 level, and then perhaps even the $2.00 level. That being said, I am still not interested in selling although we have obviously seen a significant move lower. This is because the demand for natural gas will start to pick up quite drastically rather soon. We are trading the November contract currently, and that of course suggests that we will start to focus on cold-weather. Ultimately, we have a lot of concerns out there when it comes to the next cold snap, and as this market tends to be very short term focus, we could get a sudden rush to the exits for the sellers. That’s essentially the trade I’m waiting on, and it obviously will take a significant amount of patience to get there. However, once this trade kicks off it will be brutal. In the short term I do think that a bounce to the 50 day EMA is very possible.

Natural Gas Price Fundamental Daily Forecast – Favorable Weather Indicates Further Downside Pressure

Natural gas futures are trading lower shortly after the opening on Friday. Sellers took out last week’s low at $2.207 earlier in the session, but after touching $2.198, have bounced back above it. The fundamental picture remains bearish so the price action likely reflects profit-taking ahead of the weekend or aggressive counter-trend bottom-picking in front of main bottoms at $2.185 and $2.135.

At 12:19 GMT, November natural gas futures are trading $2.208, down $0.010 or -0.45%.

Three factors are contributing to the downside pressure:  incredible looseness in the market as shown by yesterday’s bearish government storage report, lower spot gas markets and weather models showing weaker demand in the 15-day forecast.

U.S. Energy Information Administration Weekly Storage Report

The EIA reported Thursday that domestic supplies of natural gas rose by 98 billion cubic feet for the week-ended October 4. Trader estimates ranged from an 80 Bcf injection to a 107 Bcf injection.

Wall Street Journal analysts were looking for a median build of 94 Bcf. Bloomberg predicted a 99 Bcf median and NGI projected a 94 Bcf injection.

The EIA reported a 91 Bcf build for the same week last year, and the five-year average stood at 89 Bcf.

Total stocks now stand at 3.415 trillion cubic feet, up 472 billion cubic feet from a year ago, but 9 billion below the five-year average.

Short-Term Weather Forecast

According to NatGasWeather for October 11 to October 17, “High pressure will rule the eastern US today with highs of 60s to 80s apart from showers across the Northeast Coast. A strong weather system will bring rain and snow to the central US and Midwest today with lows of 10s to 30s, then tracking into the Ohio Valley this weekend with lows of 30s & 40s. This system will also cool the southern US with highs of upper 60s to 80s. A reinforcing cool shot will follow next week across the Midwest and Northeast to keep conditions a touch chilly. Overall, stronger demand the next 7-day. Overall, national demand increasing to moderate to locally high this weekend and next week.

Daily Forecast

The long-range weather models have started to converge a little, but neither shows early-season cold lingering around for more than a few days in the major demand areas. With all overnight weather models indicating a little lost demand for the coming 15-day forecast, rallies are likely to be capped.

Models are showing lost demand next week, but a slight pick-up in demand for October 20-24.

With momentum and the trend pointing lower, we could see a wash-out under $2.207 later today with a drive into $2.185 to $2.135.

A short-covering rally is likely to stall at around $2.302.

Natural Gas Price Prediction – Prices Slump Following Inventory Build

Natural gas prices continue to decline on Thursday dropping 1.2% and closing on the lows of the trading session. This comes following a larger than expected build in natural gas inventories according to the US Department of Energy. There are three storms that have a small chance of beginning a tropical cyclone that are twirling in the Atlantic. The weather is expected to remain normal for the next 8-14 day, keeping natural gas heating demand subdued.

Technical Analysis

Natural gas prices dropped nearly 1.2% on Thursday in the wake of the Department of Energy’s inventory report. Prices continued to break down and pushed through an upward sloping trend line that comes in near 2.21, which is short term resistance. Additional, resistance is seen near the 10-day moving average near 2.30. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The only caveat is that the current reading on the fast stochastic is 6, well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Natural Gas Inventories Rise More than Expected

The Energy Information Administration reported on Thursday that gas in storage was 3,415 Bcf as of Friday, October 4, 2019. This represents a net increase of 98 Bcf from the previous week. Expectations were for inventories to rise by 95 Bcf. Stocks were 472 Bcf higher than last year at this time and 9 Bcf below the five-year average of 3,424 Bcf. At 3,415 Bcf, total working gas is within the five-year historical range.

Natural Gas Price Forecast – Natural Gas Markets Continue To Struggle

Natural Gas markets continue to be very noisy, showing signs of exhaustion as it rally. However, there is a ton of support underneath so quite frankly this is a market that probably needs to be left alone at this point, as it has nowhere to be. A break down below the $2.20 level could open up the door down to the $2.00 level where we could reset and look for buyers again. We are in the time of year where eventually the buyers come back, but it’s obvious they are ready to do so yet. With that in mind, this market will have no real directionality as it is at extreme lows and everybody already knows there’s too much natural gas in the world. Quite frankly, there’s no reason to express a negative viewpoint.

NATGAS Video 11.10.19

A break above the top of the candle stick for the trading session on Thursday could be a bullish sign and could have traders jumping into the marketplace, but right now I do not anticipate that happening with any type of gusto, as the world is currently paying attention to the US/China trade talks, which has an effect on every market in every direction. Rumors continue to persist, making trading almost impossible at this point. As long as that’s going to be the case, you need to stay out of the less liquid markets like natural gas and stick to heavier traded markets such as currencies. Natural gas is probably a “no touch” until next week.

Natural Gas Price Fundamental Daily Forecast – Weakening as European Models Trend Slightly Warmer

Natural gas futures are trading nearly flat on Thursday ahead of the release of the government storage report later in the session. A growing disparity between weather models was primarily responsible for yesterday’s steep sell-off. Expectations of another loose government storage report also weighed on prices. Spot prices were no help, finishing mixed for a second session.

At 09:52 GMT, November natural gas are trading $2.236, up $0.002 or +0.09%.

Weather Models Remain at Odds

Analysis compiled by Natural Gas Intelligence (NGI) showed a growing disparity between weather models from Bespoke Weather Services, NatGasWeather and American Global Forecast System.

The overnight data reflected an even larger discrepancy as the European models trended a little warmer overall and the American ensembles moved in the colder direction, according to Bespoke Weather Services.

“This is opening up a decent gap between the two models in terms of projected demand,” Bespoke chief meteorologist Brian Lovern said.

The American data is stronger with the six- to 10-day cold shot and doesn’t show as much eastern rewarming as the European data, Bespoke said. It also implies a colder 16- to 20-day than its European counterpart.

“There is definitely some notable cold on the maps, but as of right now, it hangs back in areas that are not as important for natural gas usage,” Lovern said.

NatGasWeather said there is no change to the bigger picture as a swing to stronger demand is still on track late this week through next week as cold shots sweep across the central and northern United States. Weather is expected to then turn “quite bearish” October 19-23 as warm high pressure returns across much of the eastern half of the country. NatGasWeather also continues to view weather patterns as unsupportive unless there were to be much colder trends in the 11- to 15-day period.

The midday American Global Forecast System data, however, lost a little demand for early next week and October 20-23, but added demand late next week by stalling cold air over the eastern United States.

U.S. Energy Information Administration Weekly Storage Report

The EIA report is expected to show continued looseness and possibly “extreme looseness” in the market, Trader estimates are ranging from an 80 Bcf injection to a 107 Bcf injection for the week ended October 4.

Wall Street Journal analysts are looking for a median build of 94 Bcf. Bloomberg predicts a 99 Bcf median and NGI projected a 94 Bcf injection.

The EIA reported a 91 Bcf build for the same week last year, and the five-year average stands at 89 Bcf.

Daily Forecast

The momentum is clearly to the downside, which means traders have committed to a bearish weather forecast and government storage report. Technically, look for weakness as long as the market remains under $2.302.

The first target is $2.207, followed by bottoms at $2.185 and $2.135.

A bullish miss on government report will likely trigger a short-covering rally, but I don’t think it will change the trend.

The trend will only change if the weather forecasts suddenly introduce the possibility of prolonged cold temperatures.

Natural Gas Price Prediction – Prices Tumble Ahead of Inventory Report

Natural gas prices moved lower on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 99 Bcf build in natural gas stockpiles according to Estimize. Last week the actual release was much larger than expected, but it took until today for prices to reflect the large build. There are three storms that have a small chance of beginning a tropical cyclone that are twirling in the Atlantic. The weather is expected to remain normal for the next 8-14 day, keeping natural gas heating demand subdued.

Technical Analysis

Natural gas prices tumbled nearly 2.25% on Wednesday ahead of Thursday’s inventory report. Prices broke down and are poised to test target support which is an upward sloping trend line that comes in near 2.21. Resistance is seen near the 10-day moving average near 2.32. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The only caveat is that the current reading on the fast stochastic is 6, well below the oversold trigger level of 20 which could foreshadow a correction.

Net Injections Surged Last Week

The EIA reported that natural gas inventories increased by 112 Bcf for the week ending September 27, compared with the five-year average of injections of 83 Bcf and last year’s net injections of 91 Bcf during the same week. Working gas stocks totaled 3,317 Bcf, which is 18 Bcf lower than the five-year average and 465 Bcf more than last year at this time. The average rate of net injections into storage is 28% higher than the five-year average so far in the refill season. If the rate of injections into storage matched the five-year average for the remainder of the refill season, total inventories would be 3,674 Bcf on October 31, the beginning of the withdrawal season.

Natural Gas Price Forecast – Natural gas markets continue to test support

Natural gas markets initially tried to rally during the trading session on Wednesday but found enough resistance above the turn around and break towards the $2.25 level. This is an area that shows a significant amount of support that I believe extends down to at least the $2.20 level. Ultimately, that is a market that continues to see a lot of noise involved in it, but I do think that it’s only a matter time before buyers turn around and start pushing this market higher. What we need to see is a weather forecast coming out of the United States showing colder temperatures, that could send demand much higher. That being said, when the move does happen, it will be brutal as it is most winters.

NATGAS Video 10.10.19

Looking at the chart, there is a significant amount of resistance above at the 50 day EMA, and then above there it’s likely that the $2.50 level would offer a bit of resistance, followed by the 200 day EMA. That being said though, it’s likely that the market will continue to slice through all of those levels. This move can and will be brutal, but obviously it has not started yet. Unfortunately, it’s difficult to trade natural gas without knowing the short term or even medium-term weather forecasts for places like New York City and Boston. Technically speaking though, we are getting very close to that time a year typically we will see an impulsive candle that sends this market higher with good volume.

Please let us know what you think in the comments below

Natural Gas Price Fundamental Daily Forecast – Traders Waiting for 11-15 Day Forecast Clarity

Natural gas futures are trading lower shortly after the regular session opening on Wednesday as the 11 to 15 day forecast continues to flip-flop between warmer and colder temperatures. However, there are some who refuse to sell, remembering last year’s surprise cold temperatures that sent prices skyrocketing into the first week of November.

At 12:16 GMT, November natural gas futures are trading $2.280, down 0.008 or -0.35%.

“…What the natural gas markets are likely to notice most is the added demand October 16-18 as a reinforcing cool shot follows to keep conditions a touch chilly across the Midwest and Northeast,” NatGasWeather said.

The forecaster went on to note, “The pattern would be more intimidating if not for most datasets favoring temperatures warming across the eastern half of the country October 19-23. However, the October 18-23 period is subject to colder trends in time and needs watching.”

Rising spot prices are also underpinning prices as the second in a series of cold fronts made its way into the southern United States. Furthermore, we’re seeing a drop in volume ahead of Thursday’s U.S. Energy Information Administration (EIA) weekly storage report.

Short-Term Weather Outlook (7 Day)

According to NatGasWeather for October 9 to October 15, “High pressure will build across the Midwest and Northeast Wednesday through Thursday with highs of 60s and 70s. A strong weather system will bring rain and snow to the Rockies and Plains the next couple days with lows of 10s to 30s, then tracking across the Midwest and Northeast this weekend with lows of 30s & 40s. The southern US from Texas to the Southeast will warm with highs of 70s & 80s, besides locally 90s. A reinforcing cool shot will follow mid-week across the northern US to keep conditions a touch chilly. Overall, light demand the next couple days then stronger Friday through mid-next week.”

Natural Gas
Daily November Natural Gas

Daily Forecast

Until traders gain confidence in the 11 to 15 day forecast, we’re likely to continue to monitor around the pivot at $2.302. Yesterday, the market spent most of the day on the weak side of this level. Earlier today, the market touched this level then broke lower.

The early price action indicates that the direction of the November natural gas market on Wednesday is likely to be determined by trader reaction to $2.302.

The early weakness may be indicating the emergence of a more bearish 11 to 15 day forecast.

Natural Gas Price Prediction – Prices Ease as LNG Demand Slips

Natural gas prices made a lower high and a lower low closing the session down 0.6%. Prices are likely to hover at the current levels as demand will likely remain subdued during the shoulder season. This will last until either there is a supply disruption, from a storm, or the weather becomes colder than normal. There are three storms that NOAA (National Oceanic Atmospheric Administration) is watching. All three storms are in the Atlantic and none are expected to hit any areas that could cause a natural gas supply disruption.

Technical Analysis

Natural gas prices eased on Tuesday and continue to trade sideways. Resistance near the 10-day moving average at 2.35. Support on natural gas is seen near the October lows at 2.21. Short term momentum has whipsawed turning negative after turning positive. The fast stochastic has now moved out of oversold territory which points to accelerating positive momentum. The sideways movement of the indicator points to consolidation. Medium-term negative momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in the red with a flattening trajectory which points to consolidation.

natru

Demand for LNG Eased

The EIA reports that US LNG exports decrease week over week. Eleven LNG vessels with a combined LNG-carrying capacity of 40 Bcf departed the United States between September 26 and October 2, according to the Energy Information Administration. Three vessels were loading on Wednesday. According to the Energy Information Administration. LNG capacity has stabilized, and demand has also remain subdued in the wake of the US/China trade dispute.

Natural Gas Price Forecast – Natural gas markets formed neutral candle

Natural gas markets have gone back and forth during the trading session on Tuesday, as we continue to dance around above the support level underneath. The $2.25 level is an area that of course offers significant support as it had offered massive amounts of resistance during the month of August. At this point, the market looks as if it is trying to involve “market memory” in this area, as we start to head towards the winter season which of course will demand much more natural gas to heat homes in the United States and European Union.

NATGAS Video 09.10.19

At this point, we are below the 50 day EMA, so we are still technically in a downtrend but as we have seen just below, there is a significant amount of structure. If we can break above the 50 day EMA, then the market probably goes looking towards the $2.50 level, possibly even the 200 day EMA which is about $0.10 above there. Ultimately, natural gas continues to be oversupplied longer-term, but we do get that Winter bounce every year that we can take advantage of, so that’s essentially what I’m waiting for. As a proxy, I am using the 50 day EMA as a buying opportunity. To the downside, I don’t have much in the way of interest in selling, simply because we are at such extended lower levels. The $2.00 level underneath should considered to be the “hard floor” of the market. Quite frankly though, I would be surprised to see this market reach that area.

Please let us know what you think in the comments below