Natural Gas Price Fundamental Daily Forecast – Could Weaken Under $2.696, Strengthen Over $2.750

Natural Gas Intelligence (NGI) is saying divergent weather models are moving toward a middle ground on the temperature outlook for later this month, driving prices sideways to lower. The early price action suggests the direction of the January natural gas market the rest of the session on Friday is likely to be determined by trader reaction to $2.696.
James Hyerczyk
Natural Gas

Natural gas futures are trading lower on Friday with the market continuing to straddle a key technical level on the daily chart that could determine the near-term direction of the market. Natural Gas Intelligence (NGI) is saying divergent weather models are moving toward a middle ground on the temperature outlook for later this month, driving prices sideways to lower.

At 14:58 GMT, January natural gas is trading $2.700, down 0.019 or -0.70%.

US, European Models Moving Toward Middle Ground

The major weather models came into better agreement overnight, with the colder American model “showing much less cold” and the European model shifting toward a chiller outlook, according to Bespoke Weather Services.

After the American model had been roughly 30 gas-weighted degree days colder than the European previously, “we felt the answer likely was in the middle, which is now where the model consensus sits,” the forecaster said. “An interesting theme in the modeling is a subtle trend toward more emphasis again on the Pacific side of the pattern as the main driver, and a little less on the Atlantic side.”

“This still keeps the late month pattern very tricky, but if blocking winds up weaker on the Atlantic side, the projected shift in tropical forcing might more easily bring about some warming into early December. That is beyond the 15-day modeling, however, so confidence is lower for now.”

U.S. Energy Information Administration Weekly Storage Report

On Thursday, the EIA reported a 3 Bcf injection into U.S. natural gas stocks for the week-ended November 8, extending the refill season. The 3 Bcf build was on the higher side of the consensus, but bullish versus the historical comparisons, as last year the EIA recorded a 42 Bcf injection for the period, and the five-year average is a 30 Bcf build.

Short-Term Weather Outlook

According to NatGasWeather for the week-ending November 15 to November 21, “A reinforcing cold shot will sweep across the Great Lakes and Northeast Friday through Sunday with chilly lows of 10s to 30s. A second milder system brings heavy showers to the Southeast with lows of 30s and 40s. The Western and central US will be mild with highs of 50s to 80s, coolest in the Northwest. A weather system will track across the East/Southeast early next week, just not a very cold one. Mild conditions will cover the rest of the US early next week with much lighter national demand. A stronger cold shot is expected into the northern US late last week. Overall, high national demand through Sunday, then moderate early next week.

Daily January Natural Gas

Daily Forecast

The early price action suggests the direction of the January natural gas market the rest of the session on Friday is likely to be determined by trader reaction to $2.696.

A sustained move under $2.696 will indicate the selling pressure is increasing. Overcoming $2.696, but failing at $2.750 will signal a neutral market. Look for an upside bias to develop on a sustained move over $2.750.

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
IMPORTANT DISCLAIMERS
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.
RISK DISCLAIMER
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.
FOLLOW US