Natural Gas Price Fundamental Daily Forecast – Bullish Tone Over $3.099, Bearish Tone Under $3.078

Natural gas futures spiked higher early in the session on Tuesday as investors reacted to forecasts for more heating demand than previously expected over the next two weeks, but prices finished only marginally higher due to technical factors and a forecast of increased production.

December Natural Gas futures settled at $3.128, up $0.020 or +0.64%.

According to natgasweather.com, a “colder weather system will arrive over the north-central U.S. early next week, then tracking eastward. Overall, demand will be moderate to low, but increasing next week.”

Technically, the main range is $3.353 to $3.013. Its 50% level is $3.183. This level stopped the rally last week at $3.185 and on Tuesday at $3.182.

The short-term range is $3.013 to $3.185. Its retracement zone is $3.099 to $3.078. This zone has been providing support this week.

In other news, Thomson Reuters forecast U.S. gas consumption would rise to 73.0 billion cubic feet per day (bcfd) next week from 71.9 bcfd this week.

However, production in the lower 48 U.S. states on Tuesday was expected to rise to 74.4 bcfd, its highest level so far this month.

According to the U.S. Energy Information Administration, output from shale fields alone would increase for an eighth month in a row to a record high 60.9 bcfd in November.

Forecast

Looking ahead to Thursday’s EIA storage report, utilities likely added 69 bcf of gas into storage in the week to October 13, leaving the total amount of fuel in inventories near the five-year average for this time of year at around 3.7 trillion cubic feet (tcf).

On Wednesday, we’re looking for a bullish tone to develop on a sustained move over $3.099 and for a bearish tone on a sustained move under $3.078.

Bearish traders are hoping increased production will drive prices lower. Bullish traders are hoping production remains stable until the cold weather returns.