Natural Gas Price Fundamental Daily Forecast – Bulls Still Waiting for the Cold Weather

Natural gas futures fell for a third straight session on Friday to close out the week lower. The selling was fueled by forecasts calling for milder temperatures to start November, rising production and a tightening supply deficit.

Meanwhile a price slide in Europe also weighed on the U.S. market. Natural Gas Intelligence (NGI) reported that U.S. prices took their cue from Europe, where Dutch Title Transfer Facility prices stumbled for a second day on growing optimism that Russia would begin sending more gas to Europe in early November.

On Friday, December natural gas futures settled at $5.426, down $0.356 or -6.16%.

Energy Information Administration Weekly Storage Report

The EIA reported last Thursday that domestic supplies of natural gas rose by 87 billion cubic feet (Bcf) for the week-ended October 22. That was a bit less than the average increase of 90 Bcf forecast by analysts polled by S&P Global Platts.

Total stocks now stand at 3.548 trillion cubic feet (Tcf), down 403 Bcf from a year ago and 126 Bcf below the five-year average, the government said.

Short-Term Outlook

The main trend is up according to the daily swing chart. A trade through $6.281 will signal a resumption of the uptrend. A move through $5.070 will change the main trend to down.

The short-term range is $5.070 to $6.281. On Friday, the market closed on the weak side of its retracement zone at $5.514 to $5.652, making it resistance.

The intermediate range is $6.593 to $5.070. Its retracement zone at $5.832 to $6.011 is additional resistance.

The main range is $3.944 to $6.593. Its retracement zone at $5.269 to $4.956 is the next major downside target zone. This zone stopped the selling at $5.070 on October 19.

Buyers could come in on a test of $5.269 to $4.956.

There is some risk to the downside, however. Big sell stops could be waiting under $4.879.

We’re not likely to see the start of a significant rally until the first solid cold front hits the country.