Natural Gas Price Fundamental Daily Forecast – Bullish EIA Report Could Drive Market into $2.749 to $2.792

Natural gas futures continue to grind higher in response to strong cash market demand and a forecast calling for colder temperatures at the end of the month to extend into early March. Later today, the U.S. Energy Information Administration is scheduled to release its weekly storage report at 15:30 GMT. The report is expected to show that the storage deficit widened.

At 11:08 GMT, April natural gas futures are trading $2.712, up $0.043 or +1.61%.

Short-Term Weather Outlook

According to NatGasWeather for February 21-27, “Conditions will warm across the Ohio Valley, and Northeast the next few days with highs into the 40s to 50s but also with rain and snow along a frontal boundary between cold central US air and warming Eastern US air. The West will be cool to cold as weather systems track through. Mild high pressure will dominate the South & Mid-Atlantic Coast Thursday-Sunday with highs of 60s to 80s, warmest over the Southeast. Stronger cold shots will sweep across the northern and central US late next week. Overall, national demand will be moderate the next 7 days.”

U.S. Energy Information Administration (EIA) Report

Traders are looking for today’s EIA report to be supportive. The consensus is for a withdrawal of 164 Bcf.

Bespoke Weather Services is looking for a draw of about 172 Bcf. EBW Analytics is projecting a withdrawal of 166 Bcf. Natural Gas Intelligence is calling for a withdrawal of 170 Bcf. Finally, Bloomberg has a withdrawal range of 142 Bcf to 181 Bcf, with a median of 169 Bcf.

Going into the report, inventories are at 1,882 Bcf, 30 Bcf below last year and 333 Bcf below the five-year average.

Daily Forecast

Ahead of today’s report, “All weather models continue to advertise a mild to warm pattern across the South and East late this week into early next week, then plenty cold/bullish enough February 28-March 6,” NatGasWeather said.

The daily chart pattern indicates upside momentum is building over the short-term pivot at $2.648. This is support today. If the momentum continues then look for buyers to take out the minor top at $2.730. This will reaffirm the shift in momentum, however, buyers could run into problems inside the 50% to 61.8% retracement zone at $2.749 to $2.792. Short-sellers could show up on the initial test of this zone.