Natural Gas Price Fundamental Daily Forecast – Bearish Specs Betting Warmer Weather Will Reduce Early-Winter Demand

Natural gas prices tumbled early in the session then rebounded later before closing lower as traders played a pair of key technical retracement levels.

December Natural Gas settled at $3.108, down $0.052 or -1.65%.

The catalyst behind the selling pressure were weather forecasts showing a return to mild weather after a cold spell in the eastern U.S.

According to natgasweather.com for October 16 to October 22, “A fast-moving weather system will bring showers and cooling across the eastern U.S. Monday for a bump in heating demand.”

“High pressure will return during the second half of the week east of the Rockies through the weekend with highs of upper 60s and 70s across the northern U.S., and upper 70s to near 90 degrees Fahrenheit over the southern U.S.”

“The West will see a mix of cool and warm, averaging to near normal, but still rather hot over the Southwest and Southern California.”

“Overall, demand will be moderate to low.”

Forecast

Late last week, the market topped at $3.185. This price fell inside a major retracement zone at $3.183 to $3.223.

The new short-term range is $3.013 to $3.185. Its retracement zone at $3.099 to $3.078 is new support. Buyers came in on Monday, following a test of this zone.

The market can turn extremely bullish on a sustained move over $3.223. A sustained move under $3.078 will likely lead to a retest of the main bottom at $3.013.

Bearish specs are betting that the warmer weather will reduce early-winter demand for the heating fuel. Bullish specs may try to protect the downside as they wait for the weather to turn cold.

In other news, this week’s U.S. Energy Information Administration’s storage report is expected to show a build of about 57 billion cubic feet in the week-ended October 13.