Natural Gas Price Fundamental Daily Forecast – Daily Trend Changes to Down on Trade Through $5.469

Natural gas futures finished lower on Friday as traders reassessed the previous day’s bearish government storage report despite lingering concerns over escalating concerns over the global supply shortage.

On Friday, December natural gas futures settled at $5.763, down $0.228 or -3.81%.

Technical factors also played a role in the sell-off with the chart pattern now indicating the presence of strong short-sellers. Meanwhile, near-perfect weather conditions are expected to continue to contribute to calls for the possibility of triple digit infections.

All of this adds up to expectations for a short-term pullback, but not a major change in trend.

Short-Term Weather Forecast

According to NatGasWeather for October 1 to October 7, “A messy pattern continues as numerous weather systems impact the U.S. One system is over the Northwest, two different ones over the Plains, and a fourth over New England.

Temperatures with these systems are in the 50s to 70s besides the warmer one over Texas and the Southern Plains with highs of 80s.

The rest of the U.S. remains nice to warm with highs of 60s to 80s besides locally hotter 90s in California and the Southwest deserts.

Overall, national demand will be very low into the foreseeable future.

Energy Information Administration Weekly Storage Report

The U.S. Energy Information Administration (EIA) reported on Thursday that domestic supplies of natural gas rose by 88 billion cubic feet (Bcf) for the week-ended September 24. That was nearly the same as the average increase of 87 Bcf forecast by analysts polled by S&P Global Platts.

The actual numbers compared with a build of 74 Bcf for the same week in 2020 and the five-year average of 72 Bcf.

Total stocks now stand at 3.170 Trillion cubic feet (Tcf), down 575 Bcf from a year ago and 213 Bcf below the five-year average, the government said.

Short-Term Outlook

Counter-trend sellers stepped in on Friday at $5.947 to $6.060. They are trying to form a potentially bearish secondary lower top.

Trader reaction to $5.652 to $5.469 should set the early tone on Monday.

Taking out $5.469 will change the main trend to down. If this move creates enough downside momentum then look for a test of the 50% to 61.8% retracement zone at $5.185 to $4.892. Buyers are likely to come in on a test of this area because it is a value zone.

If there is no pullback into $5.652 to $5.469 then this will indicate the presence of strong buyers. They are going to try to shift the momentum to the upside. Taking out $6.141 could trigger an acceleration to the upside.