Natural Gas Price Fundamental Daily Forecast – European Weather Model Calling for Higher Temperatures

Natural gas futures are trading slightly higher early Monday. The market is trading inside Friday’s range which typically suggests investor indecision and impending volatility. The market is also trading between a pair of technical retracement zones which are currently keeping a lid on prices as well as providing support.

At 0327 GMT, October Natural Gas is trading at $2.944, up $0.014 or +0.48%.

The main range is $2.799 to $3.042. Its 50% to 61.8% retracement zone is $2.921 to $2.892. This zone stopped the selling last week. It should be considered support.

The short-term range is $3.042 to $2.886. Its retracement zone is $2.964 to $2.982. This zone stopped a rally late last week. It should be considered resistance.

Traders should look for a range bound market if prices remain inside $2.921 to $2.964. The trigger point for a possible rally is $2.982. This could lead to a test of $3.042. The trigger point for a possible acceleration to the downside is $2.886. Taking out this price with heavy volume could lead to an eventual test of the main bottom at $2.799.

According to the U.S. Commodity Futures Trading Commission, U.S. natural gas speculators last week boosted their net long positions for the first time in four weeks, betting prices will rise over the near-term on the chance there will be less gas than usual in storage this winter due to relatively low output and rising exports.

CFTC data showed that speculators at NYMEX and ICE added to their bullish bets by 48,553 contracts to 262,858 in the week to August 15. This was the highest level since July 18.

Providing possible support on Monday is a European weather model forecast calling for higher than normal temperatures, which could drive up demand for cooling.

According to natgasweather.com, overall natural gas demand will be high through Wednesday, then dropping to moderate.

The weather appears to be supportive. Holding $2.921 to $2.886 will indicate the presence of buyers. Overcoming $2.982 will indicate the buying is getting stronger.