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Natural Gas Price Fundamental Daily Forecast – Bias Flips Back to Upside as Futures Chase Spot Prices Higher

By:
James Hyerczyk
Published: Feb 11, 2021, 12:42 UTC

The EIA will release its weekly storage report with analysts expecting to see the year/year surplus possibly flatline or flip to a deficit.

Natural Gas

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Natural gas prices are trading higher shortly before the regular session opening at 13:00 GMT and the release of the government’s weekly storage report at 15:30 GMT.

The market confirmed yesterday’s dramatic reversal to the upside with today’s follow-through move. Helping to drive futures prices higher is Wednesday’s surge in cash gas prices.

Natural Gas Intelligence (NGI) said, “Spot gas prices mounted some of the largest gains in years as the frigid air penetrating the north/central United States stalled, leaving large population centers to bear sub-zero temperatures. NGI’s Spot Gas National Average climbed $1.040 cents to $4.835.

At 12:19 GMT, March natural gas prices are trading $2.974, up $0.063 or +2.16%.

Prices Reverse Higher after Early Weakness on Wednesday

March futures fell early in the session on Wednesday after overnight weather models took away some demand projections from the 15-day forecast. Prices rebounded after the midday outlooks added back the lost demand. The European weather model not only recovered the demand it lost overnight, but added significantly more to the outlook.

Short-Term Weather Outlook

According to NatGasWeather for February 11 to 17, “Frigid air will remain anchored across the northern and central U.S. into next week with highs of only -0s to 30s and lows of -20s to 20s. Areas of light rain and snow will continue along a sharp temperature gradient between frigid air over the north-central US and much warmer conditions from the South to the Mid-Atlantic Coast where highs are in the 60s to 80s. Frigid air over the Plains and Northern Texas with lows of 0s to 30s will slowly spread eastward this weekend into early next week for very strong national demand.”

US Energy Information Administration Weekly Storage Report

On Thursday at 15:30 GMT, the EIA will release its weekly storage report with analysts expecting to see the year/year surplus possibly flatline or flip to a deficit. As of January 29, total working gas in storage stood only 41 Bcf above year-ago levels and 198 Bcf above the five-year average, according to the EIA.

According to NGI, “A Bloomberg survey of 11 analysts produced estimates from 182 Bcf to 170 Bcf, with a median withdrawal of 180 Bcf. Reuters polled 20 analysts, whose estimates ranged from withdrawals of 188 Bcf to 150 Bcf, with a median decrease of 181 Bcf. NGI pegged the draw at 180 Bcf.”

Daily March Natural Gas

Daily Forecast

The March natural gas futures contract is currently trading on the bullish side of a key retracement zone at $2.918 to $2.794.

A sustained move over $2.918 will indicate the presence of buyers. The first upside target is $3.057. Taking out this level will signal a resumption of the uptrend with $3.062 the next likely objective. However, this is a potential trigger point for an acceleration into $3.320.

A failure to hold $2.918 will indicate the buying is weak or the selling is getting stronger. This could trigger a break into $2.794. Taking out $2.734 will change the main trend to down with $2.663 to $2.570 the next likely target zone.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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