Natural Gas Price Fundamental Daily Forecast – $2.720 Next Major Target

Natural gas futures plunged another 5 percent on Thursday after government data showed a surprise build in U.S. supplies in storage the week-ending December 1.

January natural gas futures settled at $2.763, down 0.159 or -5.44%.

According to the U.S. Energy Information Administration (EIA), weekly natural gas storage in the U.S. rose by 2 billion cubic feet (bcf) last week. Traders were looking for a withdrawal of 5 to 9 bcf.

That compared with a drop of 33 bcf in the preceding week, a fall of 42 bcf a year earlier and a five-year average decline of 69 bcf.

The EIA also said total natural gas in storage currently stands at 3.695 trillion cubic feet (tcf). That figure is 264 bcf, or around 6.6%, lower than levels at this time a year ago and 36 bcf, or roughly 1%, below the five-year average for this time of year.

Forecast

The daily chart indicates the January futures contract could continue to drop until at least $2.720 over the near-term before value-seekers and bargain-hunters return.

Short-turn it’s going to be cold on the East Coast of the U.S. However, traders are looking ahead to the forecasts after December 15 which call for mild temperatures for this time of year.

NatGasWeather.com is saying that “A strong cold front with rain and snow continues to sweep across the country and will reach the East today. Behind the cold front, temperatures will drop into the single digits to 20s across the northern U.S., and into the 30s and 40s over the southern U.S. The West will warm as the week progresses. There will be a brief between cold shots Monday, with a stronger one arriving Tuesday to Thursday next week. Overall, national demand will rapidly increase to high.”

If this forecast is correct then the warm weather from the West should move into the Midwest then East Coast sometime after next Thursday, or December 15. This is what is driving prices lower. After the 15^th, demand is likely to drop to normal to below normal.