Natural Gas Price Fundamental Daily Forecast – Creeping Higher in Anticipation of Greater Cooling Demand

Natural gas futures are edging higher for a second straight session as traders try to claw back some of its recent losses from a five-day sell-off. The reintroduction of heat into the weather forecasts in anticipation of greater cooling demand and ongoing expectations for U.S. liquefied natural gas (LNG) export demand is helping to underpin the market and drive some of the fresh speculative buying.

At 12:07 GMT, July natural gas futures are trading $3.002, up 0.028 or +0.94%.

In addition to the weather and export influences, traders should be prepared for heightened volatility with the June NYMEX futures contract set to roll off the board at the close on Wednesday.

NatGasWeather Forecast

NatGasWeather said Tuesday overnight data pointed to a bearish pattern for this weekend through June 5, when “very warm” temperatures over parts of the South and West would be “more than offset” by comfortable temperatures across the northern half of the country.

Forecasts “teased hotter conditions spreading northward out of the southern U.S. June 6-10 and where we view the data as finally close to hot enough to satisfy” and drive uninterrupted cooling demand at a national level, NatGasWeather said.

Steady-to-Strong LNG Exports Expected

Natural Gas Intelligence (NGI) reported that demand for U.S. exports of LNG also is expected to hold strong through the cooling season. Natural gas supplies were depleted in Europe and parts of Asia over a long, cold winter, driving up domestic prices on both continents and fueling the need for U.S. gas imports.

NGI said LNG feed gas flows hovered near 10.6 Bcf on Tuesday, according to NGI data. That was down from recent highs above 11 Bcf, likely because of ongoing maintenance work at export facilities.

Short-Term Outlook

If the upside momentum continues on Wednesday then don’t be surprised by a surge into $3.054 to $3.089. The heightened volatility from the June contract expiration could be the catalyst that drives prices higher.

Trader reaction to 3.054 to 3.089 should set the short-term tone of the market. The catalyst as to whether this zone becomes a secondary lower top, or the launching pad for a breakout to the upside is likely to be Thursday’s EIA report.