Natural Gas Price Fundamental Daily Forecast – Change in Weather Model Send Prices Below $2.00

The selling was revved up late Thursday after the European weather model dropped more than 15 heating degree days from its forecast for the period running from next Tuesday through January 28, NatGasWeather said in a note to clients.
James Hyerczyk

Natural gas futures are down sharply for a second session on Friday as trend traders, following the new data from the European weather model that called for weakened cold expectations for the final third of January, drove prices through the psychological $2.00 support level. The price action shows that traders shrugged off the bullish government storage miss from Thursday because it was stale news, while choosing to focus on the future.

 At 20:12 GMT, March natural gas futures are trading $1.985, down $0.061 or -2.98%.

Near-Term Weather Outlook Bearish

The selling was revved up late Thursday after the European weather model dropped more than 15 heating degree days from its forecast for the period running from next Tuesday through January 28, NatGasWeather said in a note to clients.

“The latest European model was quicker with cold exiting during the middle of next week for lost demand, then was milder with the break January 23-27 as colder air pushes out of the United States and back into Canada,” the forecaster said. “Colder air is still favored by the European model to return into the northern United States January 28-30, but the amount of cold air and how far into the United States it pushes has backed off considerably this run.”

The latest storage data Thursday from the Energy Information Administration (EIA) pointed to a tighter supply/demand balance, “but weather patterns haven’t been cooperating, as the past three weeks of warmth” has resulted in withdrawals “being a hefty 300 Bcf lighter than normal,” NatGasWeather said.

U.S. Energy Information Administration Weekly Storage Report

The EIA reported on Thursday that domestic supplies of natural gas fell by 109 billion cubic feet (Bcf) for the week-ended January 10. Analysts were looking for a 92 Bcf withdrawal.

Total stocks now stand at 3.039 trillion cubic feet (Tcf), up 494 Bcf from a year ago, and 149 Bcf above the five-year average, the government said.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.