Natural Gas Price Fundamental Daily Forecast – Forecast for Mild Spring Temperatures Weighing on Prices

Natural gas futures are trading lower early Monday as the liquidation into spring continues. At 0836 GMT, May Natural Gas is trading $2.624, down $0.009 or -0.30%.

The main trend is down according to the daily chart. The current downside technical momentum has put the market in a position to challenge the February 12 main bottom at $2.600. We could see a technical bounce on the first test of this level, but if it fails then look for a possible acceleration into the December 21 main bottom at $2.504.

Last week, the U.S. Energy Information Administration reported that weekly domestic supplies of natural gas dropped by 86 billion cubic feet for the week-ended March 16. This was in line with forecasts from S&P Global Platts which called for a decrease of 87 billion. The consensus estimate was for a draw of about 91 Bcf.

Additionally, the report showed that total stocks now stand at 1.446 trillion cubic feet, down 667 billion cubic feet from a year ago, and 329 billion below the five-year average, the government said.

Forecast

According to NatGasWeather.com for the period March 25 to March 29, “Cool conditions will linger over the Northeast through the weekend where highs will only reach the 30s and 40s. The western U.S. will see weather systems with heavy rain and snow and slightly cool conditions. The central and southern U.S. will be mostly mild to warm with highs of 60s to 80s. A milder break is expected over the Southern and eastern half of the country Tuesday to Friday of next week with light demand as highs warm above normal and into the 60s to 80s, warmest over the South.”

Short-term oversold conditions may produce periodic counter-trend moves, however, the overall trend is expected to be down as we enter spring and the low demand period.